Two events must occur before the IRS may begin collections activity:
• First, the tax must be assessed and due. The tax may be shown on a tax return showing a balance due, an audit closing agreement, an audit deficiency that was not contested, an SFR substitute for return filed by IRS or a Tax Court judgment.
• Second, the IRS must give the taxpayer a Notice of Tax Due and Demand for Payment, which will request payment within 10 days. The notice is usually mailed to the taxpayer. Generally, if the taxpayer does not respond and the liability is for individual income taxes and the liability is small, the IRS will send a series of notices and attempt to make telephone contact with the taxpayer.
At this point, if the case remains unresolved, the IRS will initiate collection action. The IRS must follow procedural requirements for proposed federal tax liens, proposed levies, and proposed seizures.
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