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The first steps in the IRS collection process

Many Massachusetts residents find themselves unable to pay their taxes. They file their tax income tax returns with the IRS knowing that at some point, the agency will come looking for payment. They may receive a bill in the mail, not understanding that this constitutes the opening gambit of the collection process.

The IRS expects taxpayers to satisfy the balance due in full. When that does not happen, it may take other actions in order to obtain payment. Meanwhile, the principal balance begins accruing interest and penalties. If a Massachusetts taxpayer can find a way to pay in full, that may be preferable. However, like most people, if a taxpayer could pay the balance, he or she would have done so.

When that happens, the taxpayer may inquire about entering into either an offer in compromise, in which the IRS settles for a lesser amount paid within a certain amount of time, or an installment agreement in which monthly payments are made toward the balance due. These options halt any further collection efforts. If neither of these options will work in a particular situation, other options may be available.

As most people expect, the IRS has a significant amount of leeway and power when it comes to collection of taxes it believes are lawfully owed. When an individual is unable to pay those taxes or disagrees with the amount, it may be a good idea to gain an understanding of his or her rights and legal options. In addition, it may not serve a taxpayer's best interests to go through the collections process alone due to the complexity of the tax laws and the tenacity of the IRS. 

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