Overview of the IRS Automated Collection System (ACS)
What is ACS?
The IRS collects taxes by initially assigning a delinquent account to either the Automated Collection System (ACS) or a Revenue Officer who works in a local IRS office. The Collection field function assigns Revenue Officers. ACS is an IRS call center with multiple locations across the country. ACS sends out computer-generated notices demanding payment and ACS agents take incoming calls generated by those notices. But they also call delinquent taxpayers and perform some limited collection actions.
Because the IRS would like to collect taxes as quickly and inexpensively as possible, the IRS assigns many accounts to the ACS. ACS processes are computerized and automated. Unless you owe more than $100,000 in taxes, it is likely that the IRS will assign your account to the ACS for collection. However, the IRS does assign some straightforward cases over $100,000 to ACS. If ACS is unable to collect on an account, the IRS may transfer the taxpayer’s account to a Revenue Officer for more drastic action.
Dealing with the IRS’s Automated Collection System
When the IRS assigns your case to ACS, you do not deal with any specific or designated agent. When you call, you talk with the first available agent, typically after a long hold of 15 to 30 minutes, or maybe even an hour. Once you get an ACS agent on the phone, you may have to explain your case no matter if you have called many times before. Though agents take notes when they talk with you and input them into their system, some record details better than others. The agent who answers your call must spend time reading through the notes to get up to speed. All this can get frustrating after a few calls.
ACS usually deals with smaller accounts and those at the beginning of the collection process. Therefore, ACS agents have the least training of any IRS representatives that interface with the public. You will find that some agents are much more helpful than others. Should you call in and get an ACS agent who seems to have a chip on their shoulder, you may want to call back later when you are almost sure to get a different agent. Remember, with money on the line, you should deal with a reasonable person.
The fact that your case is not “owned” by a specific agent also means that collection actions can be a bit hit or miss. ACS computer programs prioritize taxes owed by amount and length of time. Agents follow up most aggressively on more substantial tax amounts, mainly when they are older. Agents may start collections on these prioritized taxes owed immediately, but not get around to taking action on newer, smaller tax liabilities for months.
ACS v. Revenue Officer
You may tire of waiting on hold every time you call ACS, only to face an agent you have never talked with before. It can sometimes feel like you are not getting anywhere, and sometimes you aren’t. At this point, you may want to consider requesting to have your account transferred to a Revenue Officer. ACS has discretion in moving it, but the IRS will bear in mind your request. However, before you request a transfer, understand the drawbacks.
Although annoying at times to stay on hold every time you call ACS, a taxpayer generally has a guarantee to talk with someone. If the IRS assigns your account to a Revenue Officer, you usually can only speak with that person. If they are not in, you will have to leave a message and hope to connect with them soon.
Often, IRS revenue officers want to meet in person. They want the chance to talk with you face-to-face and to look at your supporting documents in person. If a revenue officer wants to meet with you, they will send you a 725-B letter. This notice outlines the reason for the meeting and tells you how to get in contact with the revenue officer.
In the past, revenue officers used to go to people's homes and businesses unannounced. They paid tens of thousands of house calls every year, but as of July 2023, the IRS stopped this practice for the safety of taxpayers and IRS employees.
You May Have No Choice but to Work with a Revenue Officer
When the IRS assigns a Revenue Officer to your case, it may seem advantageous to only work with one person. And it can be. No long holds waiting for an ACS agent who is unfamiliar with your tax situation. On the other hand, the Revenue Officer assigned to your account is the luck of the draw. You cannot work with ACS once the IRS transfers your case to a Revenue Officer. Moreover, it is all but impossible to have your case given to a different Revenue Officer if yours is unpleasant or intractable. Also, consider that Revenue Officers have more power over your property than ACS. More about that in a moment.
An Alternative to Transfer to a Revenue Officer
If you feel like your negotiations with ACS are going nowhere and ACS won’t transfer you to a Revenue Officer, or you do not want them to move your case to a Revenue Officer, you may be able to file a Request for a Collection Due Process (CDP) hearing. It will stop all collection actions until the hearing is completed. Your case will be moved to the IRS Office of Appeals where you can try to negotiate terms with a possibly more reasonable Settlement Officer. These people are better trained and more knowledgeable than ACS agents overall. However, there is no guarantee they will be easier to deal with overall. You can file a Request for a CDP hearing within 30 days after you have received a Notice of Federal Tax Lien or a Final Notice of Intent to Levy. It will usually be a few months or even longer before your hearing date.
The Scope of ACS
ACS can send computer-generated levy notices and can seize your bank account and garnish your wages. This information they need is usually already in their database. For example, the IRS has your bank and employee records such as W2s and 1099s. Before issuing a levy, ACS must send you a Final Notice of Intent to Levy and Notice of Your Right to a Hearing. You have 30 days to file an appeal, which will have the effect of temporarily stopping the levy. Under some circumstances, the IRS may provide you more time to file.
ACS can’t seize your house, personal property, or business assets and it can’t file lawsuits. When your account reaches a severe stage, it will be transferred to a local IRS Revenue Officer (RO). At this point, you will no longer be permitted to deal with ACS. If you call ACS and they tell you an IRS collection office took on your case, it’s time to worry. The IRS will assign an RO who can file a lawsuit to seize your house, personal property, and business assets. If you haven’t done so already, at this point, it’s time to call a tax professional for help.
What to Do to Prevent Collection Actions
If you receive a notice demanding payment from the IRS, take it seriously. Call ACS at the phone number on the letter or call 1-800-829-1040. Be proactive in working out a deal. The IRS offers many options. If you are not sure what to do, our experienced network of tax professionals can guide you through dealing with ACS and the rest of the IRS bureaucracy.