Background and why prioritization matters

The IRS cannot pursue every unpaid tax account with the same intensity. To collect billions in revenue efficiently, the agency triages cases based on risk, collectibility and statutory requirements. Prioritization determines whether a case goes to collection, becomes a candidate for an installment agreement or Offer in Compromise, or triggers immediate enforcement such as a federal tax levy or notice of federal tax lien.

The IRS also operates within the constraints of the Taxpayer Bill of Rights (TBOR), which requires fair treatment and due process for taxpayers (IRS TBOR). This means while the IRS prioritizes enforcement, it still must follow notice and appeal procedures before levying assets (see IRS collections overview: https://www.irs.gov/collections).

In my 15+ years advising clients, I’ve seen prioritization decisions make the difference between a manageable payment plan and aggressive collection action. Understanding the IRS’s framework gives taxpayers leverage when negotiating relief and helps tax professionals design realistic solutions.

How the IRS prioritizes cases — the main factors

The IRS uses a combination of data, statute, and local office discretion to rank cases. The most consistent factors are:

  • Compliance history and filing behavior: taxpayers who repeatedly fail to file returns or ignore notices are flagged for higher priority. A pattern of non-filing or prior defaults on payment agreements increases the likelihood of escalated collection (IRS collections policies).

  • Ability to pay: higher-income taxpayers or those with visible sources of funds are more likely to be targeted for aggressive collection because they’re presumed more able to satisfy liabilities. The IRS uses wage, bank, and third-party data to identify collectibility.

  • Type and severity of debt: payroll taxes and trust-fund recovery situations (employer withholding) receive high priority because they involve other people’s money and potential criminal exposure. Trust-fund taxes are often fast-tracked to lien and levy (Treasury and IRS guidance).

  • Asset visibility and liquidation potential: cases with obvious seizable assets — bank accounts, brokerage accounts, real property — are prioritized because they can produce immediate recovery.

  • Statutory deadlines and statute of limitations: the IRS must act before the collection statute expires (normally 10 years after assessment), so older balances near expiration can be fast-tracked.

  • Fraud, criminal referrals, and public interest: suspected fraud, tax evasion or cases involving public-safety agencies may be escalated for criminal investigation or priority collection.

  • Workload and local office discretion: field offices exercise judgment about when to levy or file liens based on local caseloads and staffing.

Typical outcomes tied to priority levels

  • Low-priority cases: taxpayers with low incomes, no assets, or those already in good-faith contact with the IRS may be placed in Currently Not Collectible status or routed to softer collection channels.
  • Medium-priority cases: remediable collections often become candidates for installment agreements or partial-payment plans. The IRS may pursue systematic collection actions like offsetting refunds.
  • High-priority cases: payroll tax delinquencies, trust-fund recovery cases, fraud, or accounts with seizable assets can result in liens, levies, passport certifications, or criminal referrals.

Real-world examples (anonymized)

  • Payroll tax escalation: a small-business client missed payroll tax deposits. Because trust-fund taxes affect employees and carry potential personal liability for responsible persons, the IRS prioritized the account and moved quickly toward lien and levy. Negotiating an immediate installment agreement and demonstrating a plan to remit future payroll improved the outcome.

  • Low-income taxpayer placed on hold: a retired, low-income taxpayer with limited assets who contacted the IRS and submitted hardship documentation was placed temporarily in a lower-priority queue and evaluated for Currently Not Collectible status.

These patterns are consistent with public IRS guidance and my practice experience: proactive communication and credible documentation materially change prioritization.

Who is most likely to be prioritized

  • Businesses with unpaid payroll taxes or trust-fund liabilities.
  • Taxpayers with recent income growth or visible assets (large bank balances, investment accounts).
  • Filers with a history of noncompliance — repeated failures to file or pay, or prior defaults on agreements.
  • Cases close to the collection statute’s expiration or with fraud indicators.

Practical strategies to influence prioritization and protect your position

  1. Respond early and fully to IRS notices. Silence accelerates enforcement. The first two notices typically give clear next steps; missing deadlines moves a case up the priority ladder. (See IRS notice procedures: https://www.irs.gov/collections)

  2. Document hardship and current finances. If you are low-income or experiencing a qualifying hardship (illness, pandemic-related impacts, unemployment), submit supporting documentation to request Currently Not Collectible status or reduced payments.

  3. Seek the right relief path: an installment agreement, an Offer in Compromise, or temporary hardship protection — chosen based on collectibility and case priority. For guidance on Offers in Compromise, see FinHelp’s detailed OIC overview: What Is an Offer in Compromise and How It Works. For installment agreements, see Installment Agreements Explained.

  4. Protect accounts proactively. If a levy is likely, immediate steps such as filing for an installment agreement, applying for an emergency levy release, or, in some cases, sequestering funds into protected retirement accounts can prevent bank levies. Practical steps are covered in FinHelp’s piece on How to Stop a Federal Tax Levy.

  5. Use qualified representation. Authorized representatives (CPAs, enrolled agents, tax attorneys) can negotiate with IRS Collection personnel and often obtain better outcomes because they know the local practices and documentation required.

  6. Keep future compliance current. The IRS deprioritizes taxpayers who return to compliance. Filing timely returns and paying estimated taxes reduces the chance of aggressive future action.

Common mistakes that raise priority

  • Ignoring notices until forced action occurs.
  • Assuming low visibility means immunity — the IRS runs data matches and can find bank accounts or payers.
  • Failing to distinguish types of tax debt; payroll and trust-fund taxes are treated much more harshly than individual income tax underpayments.

FAQs (brief)

  • Can the IRS seize my bank account without warning? The IRS must provide statutory notices (Final Notice of Intent to Levy) and an opportunity to request a hearing before issuing a levy, but in some emergency cases it can act quickly if it has reason to believe collection is in jeopardy (IRS collections guidance).

  • Are Offers in Compromise more likely when my case is low priority? OICs are evaluated on ability to pay, income, assets and future income. Lower-priority status (e.g., low income or Currently Not Collectible) may make an OIC unnecessary; however, the OIC process itself is independent and requires a complete financial package. See FinHelp’s Offer in Compromise resources for step-by-step guidance.

Next steps and useful resources

  • Read the IRS Collections page for foundational rules: https://www.irs.gov/collections
  • If payroll or trust-fund issues exist, consult both legal and accounting counsel immediately — those cases escalate fastest (Treasury and IRS guidance).
  • Use FinHelp guides to evaluate relief options: Offers in Compromise and Installment Agreements (linked above).

Closing note and professional disclaimer

This article draws on public IRS guidance current as of 2025 and more than a decade of practical experience advising taxpayers. It is educational and not individualized tax advice. If you face an active IRS collection action, consult a qualified tax professional (CPA, enrolled agent, or tax attorney) who can review your records and represent you before the IRS.

Authoritative sources: IRS Collection Overview and Procedures (https://www.irs.gov/collections), Taxpayer Bill of Rights (https://www.irs.gov/taxpayer-bill-of-rights), Treasury guidance on trust-fund and payroll tax enforcement.