When an IRS tax liability goes to collections, it will either be assigned to the IRS Automated Collection System (“ACS”) or to the Collection field function, where a Revenue Officer will be assigned and charged personally with attempting to collect the unpaid tax. Some delinquent accounts will initially be assigned to ACS only to be transferred to a Revenue Officer (“RO”) at some future date if the account remains unresolved.
Whether an account is assigned to ACS or to an RO can have a significant effect on a delinquent taxpayer’s experience in dealing with the IRS, and can affect the outcome of the taxpayer’s case. Either situation can come with its own unique set of frustrations. This article will highlight the major differences between dealing with ACS and dealing with an RO, and will provide helpful tips for successfully resolving a tax liability in either situation.
The most glaring difference between ACS and an RO is that with ACS, you will most likely never speak to the same person twice, even if it takes you dozens of phone calls and a touch of divine intervention to resolve your tax bill. ACS employs a huge number of people, and, judging by the wait times when calling their 800 number, they are very busy. The experience of dealing with ACS can be infuriating, as every time you call, you will likely be placed on hold (15-30 minutes is typical, and 60 minutes is not unheard of).
Equally frustrating is the fact that you are almost guaranteed to get a different representative every time you call, and delinquent tax cases frequently require a series of phone calls before a resolution is reached. Although the ACS representative should be able to access your account in the IRS database, and should be able to see the notes entered by the prior representatives with whom you spoke, it will likely take the representative a while to access and make sense of what he or she sees on their system. If the rep you spoke with on your most recent prior call failed to take good notes, it can be almost like the prior call never happened. This can be more than a little aggravating. Be prepared to explain your story starting from the beginning each time you call. Keep notes detailing the date, time, and content of each call you make with ACS. Make sure to note the employee I.D. number of the person with whom you spoke. This can come in handy if the ACS representative denies the existence or distorts the content of a prior call between you and ACS.
If your case has been assigned to an RO, you may, when calling, have to leave a voice message and play phone tag. However, you will probably never wait on hold when you call, and you will be able to deal with the same person each time. This sounds a lot better than ACS, doesn’t it? The answer is not necessarily.
When your case is assigned to an RO rather than ACS, chances are good that the RO will be stationed at an office that is within driving distance from your home or place of business. This means that you could be subject to unannounced personal visits from the RO. This makes a lot of delinquent taxpayers uncomfortable, and many ROs capitalize on this discomfort for the purpose of intimidating or bullying delinquent taxpayers into doing things that they may not wish to do. Many ROs like to meet with delinquent taxpayers in person, and it may take a series of these meetings before a case gets resolved—that is, if it gets resolved at all. It is almost unheard of for an RO to be available after hours or on weekends, which means that these meetings will have to occur during normal Monday-Friday business hours. This can be time-consuming and extremely inconvenient, particularly for taxpayers who work regular Monday-Friday business hours or those who have a busy schedule.
You also have no control over which RO gets assigned to your case. You may get one who is polite, professional, reasonable, and respectful of your rights as a taxpayer. On the other hand, you could get one who is downright nasty and seems determined to make your life miserable. If you don’t like your RO, that’s too bad. Once your account has been assigned to an RO, you can’t call ACS to resolve it, and it is nearly impossible to get the Revenue Officer’s Group Manager to switch the case to a different Revenue Officer.
So, which is better: having your case with ACS or having it with an RO? This depends on the type and size of your tax liability, whether this is your first time in collections, the specifics of your financial condition, and whether you draw a good RO or a bad one. Also, to a large degree, it depends on your personal preference. Would you rather deal with sitting on hold and dealing with a series of faceless automaton-like people in a call center who have no prior experience with your situation or someone local who may stop by unannounced or demand a series of face-to-face meetings?
Sometimes you won’t have a choice. You may call ACS to try to resolve your liability and they will tell you that your case has been transferred to the nearest collection office for resolution. This means that ACS is not going to be handling your case and a Revenue Officer will be assigned. This can be frustrating, as it may take many months before you hear from your RO, and, short of paying off your tax bill or making voluntary payments towards it, there is little that you can do to work towards a resolution until your RO makes an appearance on the scene. If your case is assigned to ACS and you do not wish to deal with them, you may request that your case be transferred to a Revenue Officer. However, they may or may not honor such a request. If your case has been assigned to an RO, you will not be able to have it transferred to ACS, and you will have to make the best of your dealings with the RO.
In order to improve your chances of having a successful ACS experience, there are several things to consider. First, the type of person that picks up your call at ACS is critical. You should be aware of the agent’s tone of voice, how they ask questions, and how they respond to you so that you can determine if they are in a good mood, whether they might be helpful or sympathetic to your situation, and whether their attitude is to do as little as possible for you during the call.
Perhaps you just spent 60 minutes on hold and you feel like you have to talk to this person because you don’t want to waste any more time on hold. That could be a mistake. Some of the ACS reps are rude, unreasonable, difficult to understand, incompetent, or just plain difficult to deal with, and you may wish to consider hanging up if you feel like you are not going to get anywhere with the person with whom you are speaking.
If you think you drew an ogre of an ACS rep, it might be wise to just start over. Someone else will pick up the phone on your next call, and they might be far more helpful. Of course there is always a chance that you will get another bad draw. However, considering that failing to resolve your tax liability could result in a frozen bank account, a garnished paycheck, or worse, this is a chance that may very well be worth taking.
Another thing you may wish to do if you are having difficulties with an ACS rep is to request to speak with a Collection Manager. There may be one available on the spot or they may have one call you back, generally within 24 hours. I would not hold your hopes up too high that you will have better luck with an ACS Collection Manager. However, on occasion, it will render better results.
If you aren’t getting anywhere with ACS, and they will not transfer your case to an RO (or you do not want them to transfer it to an RO), yet another strategy is to file a Request for a Collection Due Process (“CDP”) hearing. A timely filing of this type of appeal will halt further collection activity from ACS and will cause your case to be forwarded to an IRS Office of Appeals, where you can attempt to work out terms with a Settlement Officer. In my experience, Settlement Officers, though far from perfect, tend to be more professional, objective, knowledgeable, and reasonable than ACS representatives. There is always a chance you could draw a bad one. However, the chances are very good that it will be better than dealing with ACS.
Unfortunately, you cannot file a CDP request any time you feel like it. You can generally only file a Request for a Collection Due Process Hearing after you have received a Notice of Federal Tax Lien or a Final Notice of Intent to Levy (you may be able to file one after an actual levy, but by the time you get a hearing, it will almost invariably be far too late to reverse the damage caused by the levy). If you receive one of these notices, it will include instructions for pursuing a CDP hearing. Note that a drawback with this strategy—or possibly an advantage depending on your perspective—is that it will usually take at least a few months before you get your hearing, and it could take upwards of a year.
There are also several things you can do to improve your chances of success if your case has been assigned to a Revenue Officer. First of all, since you will be dealing with this RO most likely until your case is resolved, it is important that you establish a good professional relationship, or at least as good as you can under the circumstances. This is easier said than done.
Keep in mind that an RO is going to be constantly judging you in terms of your demeanor, your honesty, your commitment to resolving your tax liability, your financial competency, your ability to follow through on your commitments, and an almost infinite number of other factors. If you get your nose too brown, many RO’s will see right through this, and it could work to your detriment. If you are too confrontational, you run the risk of angering your RO. If you act like too much of a pushover, well, you just might get pushed over.
My advice is to be polite and respectful, but not overly friendly. Be willing to follow the RO’s instructions, but also be willing to stand up for yourself if need be. It is OK to pick a limited number of wise battles. But, if you fight everything all of the time or come off as flat out uncooperative, you are going to anger someone who has the power to make your life miserable.
One tactic you might try if you are having a hard time resolving your case with an RO is to request a conference with the RO’s Group Manager (“GM”). GMs have a strong tendency to support the actions and decisions of their ROs, so a request to speak with a GM likely will not be helpful in advancing your cause. Yet, it may be worth a try. Sometimes simply having another person take a close look at your situation and hear your side of things is enough to get past gridlock between you and an RO. It is also possible to go above the GM’s head and go to the Territory Manager, but I would only recommend this if you have a very good reason. Consult with a tax attorney or other qualified tax professional to see if your reason is good enough to warrant this.
Filing a Request for a Collection Due Process Hearing (see above) can have the effect of putting your RO on hold while you take your case to appeals. This can be a very effective method of resolving your case if your RO and GM will not agree to terms that you can live with or if your RO is threatening enforcement action.
You can also exercise your right to bring in a tax attorney or other authorized tax representative. This way, you won’t even have to deal with your RO or with ACS. Instead, communications and contacts will be handled between your attorney and the IRS. A good tax attorney with substantial experience handling tax collection cases should be able to determine which battles are worth fighting, defend your rights as a taxpayer to the fullest extent, and often negotiate better terms than you could secure on your own. He or she might even work out a settlement for a fraction of what you owe if you meet eligibility requirements. You probably don’t know if you meet these requirements, and your RO may not explain them to you.
Whether you have a tax liability that goes to ACS or to an RO for collections, I strongly encourage you to at least speak with a tax professional before attempting to resolve the liability on your own. Many tax resolution service firms, including Fortress Financial Services (my employer) offer a consultation at no charge. Depending on the specifics of your situation, you may have a straightforward case and you may not need professional representation. On the other hand, you may be embarking down a very dangerous road, where having an experienced pro on your side could be the difference between resolution and disaster which could take the form of terms that are impossible to live with, seized bank accounts, garnished wages or worse.
Just beware that there are some disreputable tax resolution firms out there who will tell you that you need representation when you don’t or take your money and fail to solve your problem. Do yourself a favor and check them out with the Better Business Bureau. If they have an “A” rating with the BBB or better, you ought to be in good hands.