How a balance becomes a collection case
Collection starts with an assessment: the tax is recorded on the taxpayer's account, whether from a filed return, an examination, a math error correction or a penalty. Under IRC 6303 the IRS must send notice and demand as soon as practicable and within 60 days after the assessment. If the taxpayer then fails to pay within 10 days after notice and demand, IRC 6331(a) authorizes levy, subject to the notice and hearing rights described below.
Inside the IRS, the Integrated Data Retrieval System (IDRS) drives the early stages automatically. Under IRM 5.1.1.10.1, IDRS generates or suppresses the notices issued when an account receivable or delinquency condition is established. It continues: “IDRS will generate balance due accounts and return delinquency investigations to the Automated Collection System (ACS).” Accounts that need field work go to revenue officers through the Integrated Collection System (ICS).
Publication 594 (Rev. 1-2026) describes the same path in plain terms: a first bill, at least one more bill, then collection actions ranging from offsetting later refunds to seizing property. Interest and penalties keep running throughout; see the failure-to-pay penalty page for how the monthly rate changes along the way.
The notice stream: CP14 to LT11
For an individual balance due, the IRS notice pages describe the standard sequence. Each notice gives a due date and explains payment options; only the later ones carry levy and hearing rights.
| Notice | What the IRS says it is | What it starts |
|---|---|---|
| CP14 | First bill: “We sent you this notice because you owe money on unpaid taxes.” | Payment due date; interest and penalties continue |
| CP501 | Reminder that a balance is still owed after the prior notice | CAP appeal available before collection action |
| CP503 | Second reminder that the balance is unpaid | Same; collection action is closer |
| CP504 | “This notice is your Notice of Intent to Levy (Internal Revenue Code section 6331 (d)).” | Levy on state refunds and a search for other levy sources |
| LT11 / Letter 1058 or CP90 | Final notice of intent to levy with notice of the right to a Collection Due Process hearing | 30-day window to request a CDP hearing under IRC 6330 |
The CP504 page says the notice tells the taxpayer “that we will begin searching for other assets on which to issue a levy.” The CDP notice is the one that matters most for deadlines: IRC 6330 requires notice “not less than 30 days before the day of the first levy” and gives the taxpayer the right to request a hearing during that 30-day period. Missing it does not end all review (an equivalent hearing is still available for a time), but the timely CDP request is what suspends levy and gives Tax Court review. See Collection Due Process hearings and the CDP deadline calculator.
Lien notices run on a separate track. When a Notice of Federal Tax Lien is filed, IRC 6320 requires notice “not more than 5 business days after the day of the filing of the notice of lien” and a 30-day period to request a lien CDP hearing beginning after that 5-day period. See federal tax liens.
Who works the case: ACS, field, private agencies
After the notices, an unresolved account generally lands in one of three places:
- Automated Collection System (ACS). Campus employees working by phone and letter. ACS can set up most payment plans, issue levies and refer cases on.
- Field Collection. A revenue officer assigned through ICS, typically on larger, business or more complex accounts. Pub 594 notes a revenue officer may visit a home or business, but “Unannounced visits are rare.”
- Private collection agencies. Inactive receivables must be assigned to contractors under IRC 6306. See private debt collection.
The IRS does not publish the internal routing criteria that decide which accounts go to ACS, the field or a private agency, so a practitioner usually learns where the case sits from the most recent notice, the account transcript, or a call to the number on the letter. The account transcript and the Transcript Delivery System pages explain how to read the collection status codes.
The enforcement tools
| Tool | Authority and key rule |
|---|---|
| Refund offset | Pub 594: refunds can be applied to tax due until paid in full; this continues during payment plans |
| Notice of Federal Tax Lien | Public notice to creditors; lien CDP rights under IRC 6320. See federal tax liens |
| Levy | IRC 6331; written notice of intent at least 30 days before levy (6331(d)) plus CDP notice (6330). See levies and wage garnishment |
| Summons | Used to secure information (Pub 594) |
| Passport certification | IRC 7345 for seriously delinquent tax debt. See passport certification |
| Trust Fund Recovery Penalty | Personal liability for unpaid withheld taxes. See TFRP |
The IRM tells employees to pick the least burdensome tool that works. IRM 5.14.1.4 instructs revenue officers to “consider collection actions that are least intrusive to the taxpayer while meeting the government’s need for efficient tax collection.” That instruction is worth citing when a proposed levy or lien filing seems disproportionate.
What stops or pauses enforcement
Several requests suspend levy by statute. Under IRC 6331(k) and IRM 5.14.1.5, no levy may be made while an installment agreement request is pending, while an agreement is in effect, for 30 days after a rejection or termination, and while a timely appeal of a rejection, default or termination is pending. The same structure applies to a pending offer in compromise under 6331(k)(1). The IRM adds a behavioral rule for employees: “Do not warn taxpayers of enforcement action if IAs are pending or in effect.”
Other pauses come from the hearing and appeal rights:
- Collection Due Process. A timely levy CDP request generally prohibits levy for the periods covered while the hearing and any Tax Court review are pending.
- Collection Appeals Program (CAP). Available before or after a levy, lien filing, or rejection or termination of an installment agreement (IRM 5.1.9.4). IRM 5.1.9.4 states: “The decision to request a CDP hearing or a CAP appeal belongs to the taxpayer.” See the Collection Appeals Program.
- Taxpayer Advocate Service. Form 911 for hardship or systemic problems. See Form 911.
- Bankruptcy and innocent spouse claims. Each carries its own collection stay; see bankruptcy and innocent spouse relief.
Several of these pauses also suspend the 10-year collection statute. A pending installment agreement, a pending offer, a CDP hearing and bankruptcy all extend the CSED. Track the effect before filing a request whose only purpose is delay; see the CSED page.
Resolution options
Revenue officers start by asking for full payment. IRM 5.15.1.2 tells them to “Request full payment of the liability” and, if an asset can be used, to request that the taxpayer liquidate it. When full payment is not possible, the options are:
| Option | When it fits | Page |
|---|---|---|
| Short-term payment plan | Full payment within 180 days; no setup fee | Installment agreements |
| Simple payment plan (formerly streamlined) | Assessed balance of $50,000 or less; no financial statement | Simple payment plans |
| Non-simple installment agreement | Larger balances; full financial analysis | Installment agreements |
| Partial payment installment agreement | Some ability to pay, but not enough to full pay before the CSED | PPIAs |
| Offer in compromise | Doubt as to collectibility, liability, or effective tax administration | Offers in compromise |
| Currently not collectible | Payment would leave the taxpayer unable to meet basic living expenses | CNC status |
Most of these turn on a collection information statement measured against the Collection Financial Standards. IRM 5.15.1.2 frames the conversation the employee is supposed to have: “Emphasize to the taxpayer how much the IRS expects from them rather than how the IRS expects them to spend their money.”
First moves for a practitioner
- Get authority for every open period. A Form 2848 that misses an open period lets the revenue officer contact the client directly to validate representation (IRM 5.1.10.7.2). Online payment plan setup through a Tax Pro Account also requires a POA for all periods with a balance.
- Pull account transcripts for every module. Confirm assessment dates, the collection status and any pending transactions such as TC 971 AC 043 (pending installment agreement).
- Find the latest notice and its deadline. A CP504 and an LT11 differ: only the final notice with CDP rights starts the 30-day hearing window.
- Check filing and payment compliance. No installment agreement can be approved until required returns are filed and current estimated tax payments or deposits are made (IRM 5.14.1.1.1).
- Gather financial information early. If the case will need a Form 433-A or 433-F, assemble three months of bank statements and pay records before the first call.
- Compute the CSED. The statute date calculator helps check whether a partial payment plan or offer makes sense against the remaining collection period.
Questions practitioners ask
How long does the IRS take to move from the first bill to a levy?
The IRS does not publish a fixed timeline. The statutory minimums are notice and demand within 60 days of assessment (IRC 6303), a 10-day period before levy authority arises (IRC 6331(a)), and a written notice of intent to levy at least 30 days before levy (IRC 6331(d) and 6330). In practice the CP14 through CP504 sequence takes several months.
Is the CP504 the notice that starts the CDP deadline?
No. The CP504 is a notice of intent to levy under IRC 6331(d), and the IRS can levy a state refund after it. The Collection Due Process hearing window comes from the final notice that cites IRC 6330, typically LT11, Letter 1058 or CP90. That notice starts the 30-day period to file Form 12153.
Can the IRS levy while a payment plan request is pending?
Generally no. IRC 6331(k)(2) and IRM 5.14.1.5 bar levy while a processable installment agreement request is pending, while the agreement is in effect, for 30 days after rejection or termination, and during a timely appeal. Exceptions include a written waiver by the taxpayer and jeopardy.
Does a revenue officer replace ACS once assigned?
Once a case is assigned to Field Collection, the revenue officer controls it. IRM 5.14.1.2 notes that cases in status 26 (assigned to Field Collection) cannot set up a payment plan through the Online Payment Agreement tool or the Individual Online Account, so the plan has to go through the revenue officer.
Do refunds still get offset during an installment agreement?
Yes. The IRS payment plan page states that future refunds will be applied to the tax debt until it is paid in full, and that scheduled payments must still be made even when a refund is applied.
What if the client cannot pay anything?
If financial analysis shows the client cannot meet basic living expenses and pay, the account may be reported currently not collectible. Collection stops, but interest and penalties keep accruing and the account can be reactivated if income rises. See the currently not collectible page.