Freshly revised in January of 2024, the IRS’ Automated Collection Service (ACS) is a functional arm of the IRS that exists with one primary directive: to collect taxes.
Essentially, the ACS is a computerized collection inventory system that sends Notices of Federal Tax Liens (NFTLs), levies, and other physically mailed communication to taxpayers while sharing case information with other departments within the broader IRS organization.
The ACS operates virtually on autopilot with very minimal human oversight, and its mission is to accomplish two measurable goals:
- Get taxpayers to remit payment for overdue taxes
- Generate contact in the form of phone calls to ACS call centers
So, what does this mean for the average taxpayer? And what can you expect if you suddenly find yourself interacting with this system?
In this article, we answer these questions and more with some helpful tips aimed at making your experience with the IRS as efficient and as low-stress as possible.
The ACS Isn’t Perfect
The very first thing you need to know about the ACS is that, like many other processes and systems within the IRS, it’s very flawed.
More recently, many ACS-initiated taxpayer communications place a heavy emphasis on getting taxpayers to take action through self-service channels to resolve their tax debts, when what these taxpayers really need is expert guidance and education about what their options really are.
[This is why Traxion Tax exists. We are a force for good for the taxpayer that needs objective, informed help with their tax problem. If this sounds like you, call us today at (303) 376-9797.]
Another downfall of the ACS is its almost knee jerk arrangement of streamlined Installment Agreements (IAs) without diligent financial analysis. This can come back to bite the IRS, as a premature leap to a streamlined IA has a much higher chance of defaulting, bringing the delinquent taxpayer back to square one and keeping the IRS unpaid.
Lastly, the ACS is massive and complicated, which is par for the course with the IRS in general. A taxpayer trying to work through the ACS system will almost never have a single point of contact, and many ACS employees won’t have the intimate details of their case like a dedicated third party would.
So, while the goal of the ACS may be well-intended, in execution the system leaves much to be desired.
Who the ACS Targets
When the IRS makes a determination about how they’ll go about collecting on an overdue tax bill, they will generally use the $100k rule to direct the case either to the ACS (if it’s below $100k) or to a Revenue Officer located in an IRS office close to the taxpayer (if it’s above $100k).
Some tax debts above $100k may still be sent through the ACS for collection, but the circumstances surrounding those debts need to be fairly simple. The ACS operates best when the cases are straightforward and don’t require too much human decision-making.
Remember: at its core, the ACS is an automated system, which is not well suited for complications.
The ACS manages its cases as a collective pool, not as individual cases. Instead of assigning a human resource (ie., a Revenue Officer) to a case needing collection, the ACS applies a weight to each case and keeps the case in the pool of other cases until it is resolved.
The older or more valuable a case is, the ‘heavier’ it gets within the ACS, and the more attention it gets in form of NFTLs and other collections actions.
When to Get Help with the ACS
You could be dealing with the ACS without even knowing it. One surefire way to determine if interacting with the ACS on your own is your best course of action is to assess how much progress you make when calling an ACS agent.
It’s unfortunately common for ACS personnel to ‘oversell’ their authority to taxpayers, when the reality is that you don’t necessarily have to do anything they may suggest you do.
You do have alternatives, and those alternatives may involve negotiations or filings that simply can’t be done within the confines of the ACS.
To learn what your options truly are, and to better understand what actions are truly better for your financial situation overall, contact Traxion Tax now. A member of our team will spend the time to understand your unique situation and work with you to develop a realistic plan to move you beyond your tax problem once and for all.
To get started, call us now at (303) 376-9797 or complete the form here.