Back taxes, liens and levies

How collection escalates

1. 1A balance-due notice, then a series of increasingly firm ones
2. 2A Notice of Federal Tax Lien, which attaches to property and becomes public
3. 3A Final Notice of Intent to Levy — this one carries appeal rights with a hard deadline
4. 4Levy on bank accounts, wages or receivables

What resolution looks like

• Get compliant first. Unfiled returns have to be filed before almost any resolution is available — see unfiled returns.
• Installment agreement — the most common outcome, and simpler than most people expect. See payment plans.
• Currently not collectible — where paying anything would prevent you meeting basic living expenses.
• Offer in Compromise — genuine, and genuinely narrow. It is based on reasonable collection potential, not on negotiation.
• Penalty abatement — often reduces the balance more than people expect. See penalty abatement.
• Innocent spouse relief — where the liability arose from a spouse’s or former spouse’s return position.

Oregon collects too

The Oregon Department of Revenue runs its own collection process and can act on a state balance independently of anything happening federally. Portland-area local taxes have their own collection procedures again. A resolution that addresses only the federal balance leaves two other creditors in place.