Overview

The IRS collection process uses progressively stronger tools to get unpaid taxes collected. Early-stage notices (e.g., CP14/Balance Due) warn you and request payment. If ignored, the IRS sends follow-up and final notices (commonly CP501/CP503/CP504 or a CP90/LT11-type notice depending on the case), then can file a federal tax lien or issue a levy on wages, bank accounts, or other property. (See IRS guidance: https://www.irs.gov/individuals/understanding-your-irs-notices-and-letters and https://www.irs.gov/businesses/small-businesses-self-employed/levy.)

Step-by-step timeline (typical)

  • 0–30 days: Initial balance-due notice (CP14 or equivalent). The notice shows the amount owed and how to pay. Responding here avoids escalation.
  • 30–90 days: Reminder notices (CP501, CP503) and phone contact attempts.
  • 90+ days: Final notice of intent to levy (often shown as CP504, CP90, or LT11). If you still don’t resolve the debt, the IRS can levy wages, bank accounts, or other property and may file a Notice of Federal Tax Lien.

Immediate actions to stop escalation

  1. Read the notice carefully and confirm it’s real. The IRS will identify a tax year, amount, and contact method (see IRS notice guidance above). Scams are common—verify at IRS.gov before sending money.
  2. Don’t ignore deadlines. Many enforcement steps only occur after a final notice deadline passes. Respond in writing if you disagree.
  3. Contact the IRS to set up an installment agreement or other arrangement. The IRS provides online payment agreements; many taxpayers qualify for streamlined options. (IRS: https://www.irs.gov/payments/online-payment-agreement-application.)
  4. If a levy is imminent, follow emergency steps to request a Collection Due Process (CDP) hearing or ask for a levy release. See the IRS CDP and levy pages for process and timelines (https://www.irs.gov/appeals/collection-due-process-cdp-hearings and https://www.irs.gov/businesses/small-businesses-self-employed/levy).

Common resolution options

  • Installment Agreement: Pay over time. Often the fastest way to stop collection action; make sure the plan covers penalties and interest. For help preparing a realistic plan, see this FinHelp guide: Setting up an Affordable Installment Agreement with the IRS.
  • Offer in Compromise (OIC): Settle for less than full balance if you can’t pay through reasonable collection. OICs require detailed financial documentation and have strict eligibility rules (IRS: https://www.irs.gov/individuals/offer-in-compromise).
  • Currently Not Collectible (CNC): The IRS may temporarily suspend collection if paying would cause financial hardship.
  • Appeal and Collection Due Process (CDP): You can request a hearing to challenge a levy or lien before enforcement.

Real-world tip from practice

In my 15+ years working with taxpayers, the single best protective step is prompt, documented contact. One client avoided a bank levy by submitting a modest, realistic installment offer and proof of household expenses; the IRS paused enforcement while we negotiated. Document every call and send follow-up letters.

When a levy arrives: emergency steps

  • Contact the IRS or a tax pro immediately and ask for the tax account transcript and a levy release if the account is in error.
  • If funds in a bank account are needed for living expenses, request an expedited release citing financial hardship and provide supporting documentation.
  • Consider filing for CDP or submitting a collection alternative (installment agreement, OIC).

Common mistakes to avoid

  • Ignoring notices—this accelerates enforcement.
  • Waiting until a levy hits—some options (CDP hearing) have strict windows.
  • Using high-cost loans without exploring IRS options first.

Authoritative resources

Further reading on FinHelp

Professional disclaimer

This article is educational and reflects general practices and IRS guidance current as of 2025. It is not legal or financial advice. For personal tax situations, consult a licensed CPA, tax attorney, or enrolled agent.