My Account Has Been Assigned for Enforcement Action

I got a new (for me) kind of letter from the IRS today.

  • It was headlined as follows:

    Your account has been assigned for enforcement action

    Please call us about your unpaid taxes

  • It was sent by regular mail (not certified mail, like the IRS occasionally uses).
  • It consolidated all of my unpaid tax years (often the IRS will send a different letter for each tax year).
  • There was a lot of boilerplate, but the important text seemed to be:

    We’re trying to collect unpaid taxes from you for the year(s) shown in the billing details below.

    We have assigned your account for enforcement action. Enforcement action may include seizing your wages or property.

    It’s important that we hear from you within 10 days.

The letter leaves it ambiguous to whom they have assigned my account. I looked for some indication of whether they might have assigned it to one of the semi-private debt collection agencies the IRS is now required to send some accounts to. I didn’t find anything to indicate this. But the text about “Enforcement action may include seizing your wages or property” — things the semi-private companies cannot do — suggests that maybe they’re keeping my account in-house.

I’ve heard (but not verified) that the semi-private companies are only being assigned accounts totaling less than $50,000. Mine, according to the letter, currently stands at $51,707.53, so I may have missed the cut-off. Too bad. I was hoping to document that process for you.

The letter identifies itself as an “LT16 Notice,” so it may be an updated version of the letter I got . That letter was followed with an attempt to seize my bank account (they tried to seize an account I was no longer using, though, so the joke was on them). they tried again with more success: seizing an account on which I was a joint signatory. They seized a third account . They made one last attempt in at the account I’d closed and got nothing. Then they got $345.19 from an account of mine . That was their last successful seizure.

So given that the last time I got one of these notices, it was quickly followed by seizure attempts, and that I haven’t gotten one of these letters or been bothered by any seizure attempts since 2009, I should probably brace for trouble. I used the IRS’s “Get Transcript” service to check my latest “Wage & Income Transcript” to see what assets and revenue sources the agency knows about for certain. I was a bit surprised to find that they apparently don’t have anything about my most significant source of income for last year. I’m guessing they just lost or mishandled the paperwork. Lucky me. What do they know about?

  • a small Roth IRA
  • that I transferred $5,000 from my regular IRA into my Roth IRA at a brokerage different from the one that holds that small Roth
  • my Health Savings Account
  • a Lending Club account that by now has less than $100 in it
  • the royalties I get from Amazon for the sales of my books

The IRS tends not to go after IRAs and HSAs until they get desperate. As the clock is ticking on the statute of limitations for the oldest year in my account, though, they may be getting to that stage. If they go after my Lending Club account and my book royalties, they’ll be pretty disappointed by how little they end up with. I can partially stymie them in that case by putting all of my books on sale and stopping the royalties. If they clean out my retirement accounts there’s not much I can do about it. The worst thing would be if they hit my HSA. Not only would they take my money but I’d get hit with a penalty for using my HSA for non-health-related spending (I’m not sure if I could ameliorate this by quickly making a deposit to the account to make up for it).

Coincidentally, at the NWTRCC blog today, Erica Weiland writes about the seemingly haphazard IRS collections process and the letters people receive during it.

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