IRS Collections Restarted After Resolution Checklist
Understanding Collection Restart
IRS collections restart after resolution occurs when the agency resumes collection activity against a taxpayer whose case was previously closed or placed into temporary hold status. This situation typically happens because a prior agreement has expired, been defaulted on, or new tax debt has been assessed.
The IRS has statutory enforcement authority under IRC § 6331 regardless of collection history.
Prior payment arrangements, such as installment agreements or currently not collectible status, temporarily suspend enforcement actions, but the underlying authority exists continuously based on the assessment of tax liability.
When This Situation Applies to You
This guidance applies if you had an installment agreement that has ended or been terminated.
You face this situation if your currently not collectible status has expired and the IRS has resumed enforcement.
You may face this situation when
- You completed a prior collection arrangement and now receive new collection notices.
- Your accounts were consolidated or transferred, triggering new collection activity.
- You receive notices stating collections have resumed after a previous hold or
arrangement.
What Triggers Collections to Restart
Your prior arrangement may have expired naturally after reaching its scheduled end date.
Alternatively, you may have defaulted on required payments, or the IRS may have determined your financial situation has improved since the last agreement was established.
New tax debt may have been assessed after your prior arrangement was completed. Failure to file required tax returns while under a payment arrangement also triggers a collection restart.
Critical Actions When Collections Restart
Locate the specific IRS notice that triggered the restart. Read the entire notice carefully to identify the reason for the restart, the account it applies to, and any deadline mentioned.
Verify the type of prior arrangement by confirming whether you had an installment agreement, currently not collectible status, or another resolution. Check your files for the original agreement letter or review your IRS online account for payment history records.
Identify whether the prior arrangement expired naturally, you defaulted on required payments, or the IRS reopened the case due to new information. Confirm that all tax returns for the current and prior tax years have been filed, as unfiled returns will prevent any new arrangement.
Gather current financial documentation, including
- Recent pay stubs and bank statements
- Mortgage or rent documentation
- Evidence of current hardship or changed circumstances
Understanding Enforcement Timelines
After receiving a final notice of intent to levy, such as CP90, LT11, or Letter 1058, the IRS must wait at least 30 days before levying. Typically, the agency waits 30 days after this final notice, though this timeline can vary based on circumstances.
Installment agreement defaults indicated by the CP523 notice result in termination 30 days after the notice date, followed by potential levy action. Overall time from the first balance due notice to levy action varies widely but typically spans many months.
Responding to Collection Restart Notices
Taxpayers should respond as quickly as possible to collection notices. For notices with specific deadlines, such as CP523 giving 30 days before installment agreement termination or final notice of intent to levy giving 30 days to request a CDP hearing, those stated deadlines are what matter.
Contact the IRS at the phone number on your restart notice or the collections line to discuss why collections restarted and what options exist. Request the name and phone number of your assigned revenue officer or ACS representative.
Obtain a full account transcript to see all prior arrangements, payment history, balances owed, and notes about why the arrangement ended using IRS.gov transcript tools or by requesting in writing. Based on your financial situation, propose reinstating a prior arrangement, creating a new installment agreement, submitting a new hardship request, or requesting an offer in compromise.
Payment Plan and Resolution Options
Resolution timeframes vary significantly depending on the situation, complexity, required financial documentation, and IRS processing times. Reinstating a defaulted installment agreement may be approved relatively quickly if you can pay the past-due amount, while establishing new payment arrangements often requires a financial statement review using Form
433-F, Form 433-A, or Form 433-B and can take several weeks or longer.
You may apply for a payment plan through the Online Payment Agreement tool on IRS.gov if you meet eligibility requirements. Collection activity decisions consider multiple factors, including filing compliance status, reason for prior arrangement ending, taxpayer’s current financial condition, and collection potential.
Currently Not Collectible Status
Currently not collectible status remains in effect until the IRS determines financial circumstances have improved or the Collection Statute Expiration Date expires. Periodic reviews occur often annually or every one to two years to assess whether the taxpayer’s financial situation has changed, but the status continues as long as hardship conditions persist and the Collection
Statute Expiration Date has not expired.
If your circumstances have genuinely changed and you believe you qualify for currently not collectible status again, formally request a financial analysis in writing with supporting documentation. Be prepared to provide detailed information about monthly income, necessary living expenses, and any extraordinary circumstances affecting your ability to pay.
Offer in Compromise Default Situations
An accepted offer in compromise can be defaulted if the taxpayer fails to meet payment terms, refund recoupment requirements, or five-year compliance requirements. Five-year compliance means filing all required returns on time and paying all taxes in full during the monitoring period.
The IRS may also rescind an offer in compromise in cases of fraud or misrepresentation. When an offer defaults, the original tax debt is reinstated minus payments already made, and collection activity resumes.
Common Mistakes That Harm Your Position
Missing any deadline stated on the restart notice eliminates your opportunity to negotiate and triggers automatic enforcement action. Failing to file current-year tax returns while collections are active prevents any new arrangement and is treated as non-compliance.
Additional costly errors include
- Making a one-time payment without communicating your long-term plan
- Providing incomplete or inaccurate financial information to the IRS
- Waiting to contact the IRS until after the wage garnishment or levy begins
- Assuming a prior arrangement automatically renews without contacting the IRS
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