Many of my clients owe the IRS, and have owed for years. Yet, the IRS has only ever sent occasional Notices of Balance Due, taking no normal collections actions. These clients haven’t received threatening IRS Collections Notices, been contacted by a live IRS Revenue Officer, had bank accounts levied or wages garnished, had an IRS tax lien filed against real property, or had a hold put on their passport. What’s going on? Why isn’t the IRS collecting from taxpayers who often owe hundreds of thousands of dollars?
What Does Active IRS Collections Action Consist Of?
Estimates vary on how many Americans owe federal taxes, but it’s between 18-22 million. On hundreds of thousands of delinquent accounts, the IRS has taken no formal collections action. When the IRS actively seeks repayment, it uses the following tactics:
- mails a sequence of 4 – 6 Collections Notices over 6-12 months, of increasing threat levels and urgency, warning of impending liens, levies and garnishment;
- assigns an IRS Revenue Officer to contact the taxpayer (in writing) for an interview or for payment;
- garnishes wages, levies on bank accounts and/or files Notices of Federal Tax Lien on real property;
- notifies the State Department to revoke a taxpayer’s passport or passport renewal.
Many taxpayers owing the IRS are being ignored. At most, the IRS sends an occasional Balance Due notice. Why doesn’t the IRS try to collect from everyone?
IRS Understaffed and Overwhelmed
The IRS is overwhelmed and understaffed. It was already understaffed before Covid, after a decade of budget cuts to the IRS by the Republican-controlled Congress of the 2010s. Then, when Covid hit early 2020, most work at the agency shut down for fifteen months until remote-work-only restrictions were lifted. Why couldn’t IRS agents work from home? The highly-sensitive taxpayer databases can only be accessed in IRS offices, with tight security on database access and Internet protocols. Also during Covid, the federal government added to the IRS workload by putting the agency in charge of the physical distribution of most Covid-related financial aid and checks. So, just as the IRS’ ability to perform work shut down, its work load shot up.
Then, when the second Trump administration returned to political power in winter 2025, Congress cut the Biden funding increases to the IRS, and Elon Musk took his DOGE chain-saw to the federal government bureaucracy. IRS staff was reduced another 25%. And most of the employees leaving were the most experienced agents. The upshot is that the IRS has been knee-capped. Anyone who has tried calling the IRS knows that a wait time of an hour is short, and that it’s not uncommon to be on hold for several hours only to be disconnected when an IRS agent finally answers the line.
Should I Be Worried that The IRS Hasn’t Tried to Collect From Me?
No. Even if you’ve owed the IRS for years, but haven’t received anything except occasional “Balance Due” reminders, that is ENTIRELY NORMAL. I have clients with multi-million dollar liabilities that the IRS has ignored for almost TEN YEARS. Rest assured, there is absolutely nothing odd about the IRS sending only balance due notices. That’s because the balance due notices are generated automatically by the IRS computers, whereas collections notices are often only begun when a live revenue officer has taken up or noticed the case. But, because of the extreme understaffing at the IRS, there simply aren’t enough employees to actively pursue the hundreds of thousands of taxpayers who currently owe.
When Can I Expect the IRS to Start Collections Actions Against Me?
There’s no way to predict when the IRS will come after you, or even *if* it will come after you. I have clients who owe a few thousand dollars and the IRS has been aggressively seeking payment. I also have clients who have owed millions of dollars for almost a decade, a liability about to expire, that the IRS has never attempted to collect on. That means the U.S. government, which is running an huge budget deficit, is losing out on money owed to it.
What’s the Drawback of Not Being Pursued by IRS Collections?
Outstanding tax liabilities accrue interest daily because the IRS views your failure to timely, full-pay your taxes as the federal government loaning you money. So, you’re charged interest. That interest will accrue for as long as you still owe the IRS, or until the IRS debt is no longer collectible under the 10-year statute of limitations or it is discharged in a bankruptcy. Implication: let’s say the IRS waits 7 years to begin hounding you for what’s owed: interest has accrued and grown your balance due. So, a wait-and-see-if-the-IRS-wakes-up-to-me strategy could end up costing you much more than if you’d paid what you owe originally. Is it worth it to take that chance? Only you can make that determination because it depends on what you want to pay and when.
But, if you owe the IRS and don’t know if you should stay under the radar or raise your hand to pay them, give me a call and we can talk about the specifics of your situation. 818.889.8080.
August 28, 2026