If an IRS Revenue Officer has contacted you about unpaid taxes, your IRS collection problem has reached a stage that deserves immediate attention.
A Revenue Officer is not simply someone calling to remind you that you have a tax balance. Revenue Officers are IRS collection employees assigned to collect delinquent federal taxes and secure delinquent tax returns. They may investigate your finances, request detailed financial information, establish deadlines, demand missing tax returns, discuss payment of your tax debt, and take steps toward enforced collection when a case remains unresolved.
If you owe substantial IRS back taxes and have recently received a letter, telephone call, or other contact from an IRS Revenue Officer, this is not the time to continue ignoring the problem.
It also does not necessarily mean that you must immediately pay the entire tax debt.
Depending upon your financial circumstances, there may be several IRS tax resolution options available.
The important thing is to understand what the Revenue Officer wants, what the IRS can do next, and how your financial information will affect the resolution of your case.
What Is an IRS Revenue Officer?
An IRS Revenue Officer is a civil enforcement employee whose job includes collecting delinquent federal taxes and securing delinquent tax returns.
Revenue Officers are generally involved in collection matters that require more direct attention than routine IRS correspondence.
If your case has been assigned to a Revenue Officer, you may be dealing with an actual person who is actively working your collection case rather than simply receiving computer-generated IRS notices.
The Revenue Officer may want to know:
- Why the taxes have not been paid
- Whether all required tax returns have been filed
- Where you work and how much you earn
- Whether you own a business
- What bank accounts you have
- Whether you own real estate
- What vehicles you own
- Whether you have retirement or investment accounts
- What other assets you own
- What your monthly household expenses are
- Whether you can borrow against or liquidate assets
- How much you can afford to pay the IRS
For business taxpayers, the Revenue Officer may also investigate unpaid payroll taxes, employment taxes, Forms 941, Trust Fund Recovery Penalties, business assets, accounts receivable, and the individuals responsible for collecting and paying employment taxes.
The answers to these questions can have a major impact on how the IRS attempts to collect your tax debt.
Why Was My IRS Case Assigned to a Revenue Officer?
There is no single reason a tax case is assigned to an IRS Revenue Officer.
Factors can include the amount and type of tax owed, the taxpayer’s compliance history, unfiled tax returns, business or payroll tax liabilities, prior collection efforts, and other circumstances requiring direct collection activity.
The important point is this:
If a Revenue Officer has been assigned, someone at the IRS may now be actively working your case.
Ignoring automated IRS notices is risky. Ignoring an assigned Revenue Officer can create an even more serious problem.
What Can an IRS Revenue Officer Do?
Revenue Officers have significant collection responsibilities and access to powerful federal tax collection tools.
Depending upon the circumstances and applicable procedural requirements, an IRS collection case can involve:
- Federal tax liens
- Bank levies
- Wage levies or garnishments
- Levies against accounts receivable
- Seizure of certain assets
- Financial investigations
- Collection Information Statements
- Requests for delinquent tax returns
- Summonses for information or records
- Investigation of business payroll tax liabilities
- Trust Fund Recovery Penalty investigations
- Other IRS collection action
This does not mean that every taxpayer assigned to a Revenue Officer will have property seized or a bank account levied.
It does mean that you should take the assignment seriously and develop a plan for resolving the tax debt.
The Revenue Officer Wants Form 433-A or Form 433-B. What Does That Mean?
One of the most important stages of many IRS collection cases is the financial investigation.
A Revenue Officer may request a Collection Information Statement, including IRS Form 433-A for individuals or Form 433-B for businesses, depending upon the case.
These forms can require extensive financial disclosure.
The IRS may ask for information concerning:
- Wages and other income
- Bank accounts
- Cash
- Investments
- Retirement accounts
- Real estate
- Vehicles
- Life insurance
- Business interests
- Accounts receivable
- Credit availability
- Household expenses
- Business income and expenses
- Other assets and financial resources
The Revenue Officer may also request supporting documents such as bank statements, pay statements, loan statements, mortgage information, retirement-account statements, business records, and other financial documentation.
Do Not Treat Form 433-A as Just Another Form
This is important.
The financial information you provide can influence what the IRS believes you are capable of paying.
The IRS does not necessarily accept every household expense simply because you actually incur it. IRS collection standards and other rules can affect how expenses are evaluated.
Likewise, assets that you do not consider readily available may still be important to the IRS’s collection analysis.
Before providing detailed financial information, you should understand how the IRS is likely to evaluate it and how it affects your tax-resolution options.
Can I Negotiate With an IRS Revenue Officer?
Yes. Resolving the liability is one of the central purposes of the collection process.
Depending upon your circumstances, possible IRS tax debt resolution strategies may include an Installment Agreement, Partial Payment Installment Agreement, Offer in Compromise, Currently Not Collectible status, or another appropriate resolution.
The right strategy depends upon the facts.
IRS Installment Agreement
An IRS Installment Agreement allows qualifying taxpayers to pay their tax debt over time.
The amount of an appropriate monthly payment can depend upon the tax liability, collection period, income, allowable expenses, assets, and other financial circumstances.
If the IRS is requesting a monthly payment you cannot afford, simply accepting that amount may not be the best approach.
Partial Payment Installment Agreement
A Partial Payment Installment Agreement may be appropriate for some taxpayers who can make monthly payments but cannot fully pay the IRS debt before the applicable collection period expires.
These arrangements generally require detailed financial analysis and may be subject to future review.
Offer in Compromise
An IRS Offer in Compromise may allow a qualifying taxpayer to settle federal tax debt for less than the full amount owed.
But owing a large amount of money does not automatically mean you qualify.
The IRS generally evaluates your assets, equity, income, allowable expenses, and future ability to pay when considering an Offer in Compromise based upon inability to fully pay the liability.
An OIC should therefore be based on a careful financial analysis rather than simply choosing an amount you would like the IRS to accept.
Currently Not Collectible Status
If you cannot make meaningful payments without being unable to meet necessary living expenses, you may qualify for Currently Not Collectible status based upon financial hardship.
CNC status does not erase the tax debt, but it can suspend active collection while the taxpayer lacks the ability to pay.
Penalty Abatement
If penalties make up a significant portion of your IRS balance, penalty abatement may also be worth evaluating.
Depending upon the taxpayer’s circumstances and compliance history, relief may be available under First Time Abatement or reasonable-cause standards.
What If I Have Unfiled Tax Returns?
Unfiled tax returns can complicate an IRS Revenue Officer case.
Before the IRS will approve many long-term tax-resolution alternatives, taxpayers generally need to become compliant with required filing obligations.
A Revenue Officer may establish deadlines for delinquent returns to be filed.
If you have several years of unfiled federal tax returns, the strategy may therefore involve two separate but related problems:
- Bringing the required returns into compliance; and
- Developing a resolution for the resulting IRS tax debt.
Ignoring unfiled returns because you expect to owe additional taxes usually makes the overall problem more difficult to resolve.
Business Owners Should Take Payroll Tax Cases Especially Seriously
If your business owes federal payroll taxes, Revenue Officer involvement can create additional concerns.
Employers hold certain employment taxes in trust for the United States. When those taxes are not properly paid, the IRS may investigate whether individuals associated with the business should be personally assessed the Trust Fund Recovery Penalty (TFRP).
Potentially responsible individuals can include business owners, officers, employees, or others who had sufficient responsibility and authority over the company’s financial affairs and tax obligations.
A payroll tax problem can therefore evolve from a business tax liability into a potential personal tax liability for individuals associated with the business.
If a Revenue Officer has begun asking questions about who controlled business finances, who signed checks, who determined which creditors were paid, or who was responsible for payroll taxes, you should take the matter seriously.
Can a Tax Attorney Deal With the Revenue Officer for Me?
In many circumstances, yes.
A taxpayer can authorize a qualified representative to represent the taxpayer before the IRS.
When I represent a taxpayer in an IRS collection matter, I can communicate directly with the Revenue Officer, determine what information the IRS is requesting, help prepare appropriate financial disclosures, evaluate possible collection alternatives, and negotiate toward a resolution.
That can be particularly valuable when a taxpayer is uncomfortable communicating with the IRS or does not understand how the requested financial information may affect the case.
It also means you have an attorney analyzing the legal and financial implications of the IRS’s requests rather than trying to navigate the collection process alone.
What Should I Do If an IRS Revenue Officer Contacts Me?
Do not panic, but do not ignore the contact.
You should determine:
- Which tax years and liabilities are involved
- How much the IRS claims you owe
- Whether all required tax returns have been filed
- Whether a federal tax lien has already been filed
- Whether levy notices have been issued
- Whether any appeal deadlines are running
- What financial information the Revenue Officer is requesting
- What deadline the Revenue Officer has established
- Whether you have assets the IRS may consider available for collection
- What tax-resolution alternatives may be available
The earlier these issues are analyzed, the more opportunity there may be to develop a strategy before the case escalates.
Don’t Wait for a Bank Levy or Wage Garnishment to Seek Help
One of the worst times to begin thinking about tax resolution is after your bank account has already been levied or your employer has received an IRS wage levy.
At that point, you may be trying to solve both the underlying tax debt and an immediate financial emergency.
If an IRS Revenue Officer has already contacted you, you have a clear warning that the collection problem requires attention.
The goal should be to determine whether the case can be resolved before more aggressive IRS collection action becomes necessary.
Indiana IRS Tax Resolution Attorney
I am Eric C. Keuling, founder of the Keuling Law Firm, and I have more than 18 years of tax and tax-resolution experience representing and advising individuals and businesses on tax matters.
Before founding the Keuling Law Firm, my professional tax experience included serving as a Tax Director with Grant Thornton in Tokyo, Japan. I also earned an LL.M. in Taxation from the University of Florida Levin College of Law.
Today, a significant focus of my practice is representing individuals and businesses facing IRS and Indiana Department of Revenue tax problems.
My tax-resolution practice includes:
- IRS Revenue Officer representation
- IRS back tax resolution
- IRS Installment Agreements
- Offers in Compromise
- Partial Payment Installment Agreements
- Currently Not Collectible status
- Penalty abatement
- IRS tax liens
- Bank levies
- Wage garnishments
- Collection Due Process matters
- Unfiled and delinquent tax returns
- Tax preparation and compliance assistance
- Business and payroll tax liabilities
- Trust Fund Recovery Penalties
- Indiana Department of Revenue tax resolution
- Tax audits and other tax controversies
When you hire the Keuling Law Firm, I personally handle your tax matter. Your case is not passed from a salesperson to a case manager. I work directly with you, communicate with the IRS or Indiana Department of Revenue on your behalf, evaluate the available tax-resolution options, and develop a strategy based upon your particular circumstances.
Has an IRS Revenue Officer Contacted You? Now Is the Time to Address the Problem.
If an IRS Revenue Officer has contacted you, requested a Form 433-A or Form 433-B, demanded financial records, established a deadline, or warned about possible collection action, do not assume you can simply deal with the problem later.
Your IRS collection case may already be receiving direct attention.
And if you cannot afford to pay the IRS in full, that does not necessarily mean there is no solution.
An Installment Agreement, Offer in Compromise, Partial Payment Installment Agreement, Currently Not Collectible status, penalty abatement, or another tax-resolution strategy may be available depending upon your circumstances.
Contact the Keuling Law Firm to schedule a consultation about your IRS tax problem.
I can review the Revenue Officer’s requests and your IRS collection situation, explain the risks and available options, and help develop a strategy for resolving your tax debt before the situation becomes more serious.
The IRS already has someone working its side of the case. Make sure you understand and protect yours.
This article is provided for general informational purposes only and does not constitute legal or tax advice. IRS collection procedures, deadlines, and tax-resolution options depend upon the particular facts and circumstances of each case.