IRS Collection Priorities: How the Agency Decides Which Accounts to Pursue

Why IRS collection priorities matter

The IRS does not pursue every delinquent account with the same intensity. Instead, it triages cases using a mix of legal rules, internal policy, and data-driven scoring. Understanding these priorities lets you predict likely enforcement actions, choose the right response, and preserve options like payment plans, offers in compromise, or appeals.

In my work as a CPA advising taxpayers for more than 15 years, I’ve seen how small timing and documentation choices can change the IRS’s approach from aggressive enforcement to a negotiated resolution. This article explains the factors the IRS weighs and practical steps you can take. Authoritative guidance from the IRS includes Publication 594 and the Collection Financial Standards (IRS.gov).

The core factors the IRS uses

The IRS evaluates each delinquent account against several recurring themes. These are not strictly hierarchical—agents and automated systems weigh them together.

• Collectibility and expected recovery: The IRS prioritizes cases where enforcement is likely to collect revenue. Accounts tied to recent wages, bank accounts, or real property are more attractive from a cash-recovery standpoint.

• Type of tax liability: Trust fund taxes (employee withholding) and certain payroll liabilities are high priority because employers are personally accountable for withholding and the government treats those funds as trust money.

• Compliance profile and fraud indicators: Taxpayers with recent audits showing unreported income, large understatements, or prior noncompliance are more likely to see aggressive follow-up.

• Age of the debt and statute limits: Most tax debts are collectible for 10 years from assessment (the Collection Statute Expiration Date, or CSED). Older debts nearing their CSED may be managed differently; see the FinHelp page on Collection Statute Expiration Date (CSED) for details.

• Financial hardship and vulnerability: The IRS considers documented hardship—medical emergencies, natural-disaster losses, or other serious financial distress—when deciding whether to delay levies or pursue softer remedies (see IRS Collection Financial Standards).

• Volume and resource allocation: With hundreds of millions of accounts in the system, the IRS uses automated filters to route cases to field revenue officers, automated collection systems, or low-touch correspondence programs.

How selection actually happens: automation vs. human judgment

The IRS uses both automated scoring models and human casework.

• Automated screening: Many accounts pass through rules-based systems that flag cases for throughput actions—late notices, automated liens, or referral to field collections. These systems look for triggers such as unfiled returns, recent assessments, or direct deposit refunds being intercepted.

• Field collections and revenue officers: High-dollar or complex accounts are assigned to revenue officers who prioritize based on collectibility, legal leverage (liens/levies), and taxpayer behavior.

• Appeals and Collection Due Process (CDP): If a taxpayer files a CDP request or an Offer in Compromise, that case will be handled differently while appeals or negotiations are pending.

Key tools and events that change priority

Certain events or taxpayer actions can move a case up or down the priority list:

• Filing an Offer in Compromise (OIC): Submitting an OIC signals inability to pay; while it is evaluated, the IRS often suspends some collection actions. For more on OICs, see FinHelp’s Offer in Compromise resources.

• Filing for bankruptcy: A bankruptcy filing triggers an automatic stay that halts most IRS collection activity while the bankruptcy is in effect, often temporarily suspending the CSED.

• Payment activity: Prompt partial payments or a consistent installment agreement can lower enforcement priority.

• Appeals and collection due process requests: Active appeals generally pause levy actions while the appeal is adjudicated.

Real-world examples (practical sense from my practice)

• Small-business payroll taxes: I represented a small-business owner with unpaid payroll taxes. Because those are trust fund liabilities and payroll was recent, the IRS prioritized aggressive collection—threatening trust fund recovery and levies. Documenting cash-flow realities and proposing a short-term partial-pay installment agreement avoided immediate asset seizure.

• Medical hardship: A taxpayer with large medical bills and a modest tax debt provided detailed medical and financial records. That documentation resulted in a softening of collection activity and an offer of a low-dollar monthly plan.

• Older balances near CSED: I had a client whose oldest assessments were within two years of the CSED. We focused on the CSED strategy, confirming assessment dates and avoiding actions that would toll or extend the collection period, which helped limit aggressive collection.

What you should do if you’re on the IRS radar

1. Don’t ignore notices. Ignoring increases the chance of liens and levies. Respond promptly with requested documentation.

2. Get accurate assessment and CSED dates. Confirm the assessment date on your account transcripts. CSED is usually 10 years from assessment; knowing the date affects strategy. See the FinHelp page on Collection Statute Expiration Date (CSED) for guidance.

3. Provide the right financial documentation. Use Form 433-F (Collection Information Statement) or Form 433-A when the IRS requests it. Honest, thorough documentation helps agents evaluate reasonable payment options.

4. Consider appropriate relief options: installment agreements, partial-payment installment agreements, or an Offer in Compromise if eligible. For many taxpayers, negotiating an Installment Agreement is faster; for others with little ability to pay, an OIC may be appropriate. See FinHelp’s Offer in Compromise overview for steps and documentation.

5. Don’t assume every plan is automatic. You typically must provide documentation and meet program requirements.

6. Keep filing returns and paying future taxes. Current compliance is often a condition for favorable resolutions.

Common mistakes and misconceptions

• “They’ll stop if I ignore them.” False. Nonresponse usually escalates enforcement.

• “An OIC is easy to get.” False. Offers in Compromise require strict eligibility and documentation, and the IRS often prefers installment agreements when collectibility exists.

• “All tax debt is equal.” False. Trust fund liabilities and recent assessments usually get higher priority.

When to get professional help

If your tax liability is large, complex, or involves payroll trust issues, hire a CPA, enrolled agent, or tax attorney. In my practice, bringing a professional early helped clients avoid liens and negotiate installment agreements with realistic terms.

Use a practitioner with collection experience. They can request Collection Due Process appeals, prepare accurate financial statements (Form 433 series), and identify when an Offer in Compromise or partial-payment installment agreement is preferable.

FAQs

Q: How long does the IRS have to collect?
A: Generally 10 years from the date of assessment (CSED), but certain events—bankruptcy, some payments, or other legal pauses—can suspend or extend that period. See IRS Publication 594 for official rules.

Q: Will the IRS immediately seize assets?
A: Not usually. The IRS typically sends notices and attempts to contact you first. However, for high-priority liabilities (like trust fund taxes) or if you ignore notices, more aggressive actions can follow.

Q: Can I stop levies by entering an Installment Agreement?
A: Often yes—if you meet the IRS’s terms and make timely payments. Partial-payment plans may be available when full payment is not practical.

Sources and further reading

• IRS Publication 594, The IRS Collection Process (IRS.gov)
• IRS Collection Financial Standards (IRS.gov) — used to evaluate reasonable living expenses
• Taxpayer Advocate Service reports (taxpayeradvocate.irs.gov)

Internal FinHelp resources:

• Offer in Compromise (OIC) — https://finhelp.io/glossary/offer-in-compromise-oic/ (guide to OICs and documentation)
• Collection Statute Expiration Date (CSED) — https://finhelp.io/glossary/collection-statute-expiration-date-csed/ (how CSED works and why it matters)
• Installment Agreements vs. Offers in Compromise — https://finhelp.io/glossary/installment-agreements-vs-offers-in-compromise-which-is-right-for-you/ (comparative guide)

Professional disclaimer

This article is educational and does not substitute for individualized tax advice. Rules change and cases vary—consult a qualified tax professional about your specific situation.

(For IRS rules cited, see IRS Publication 594 and the Collection Financial Standards at IRS.gov.)