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Published:   |   Last Updated: October 17, 2023

Collection Station — Litigation Track

  • Lien Enforcement
  • Government Files Suit in Court
  • Reduce Assessment to Judgement
  • Foreclosure of Tax Lien
  •  Action to Enforce Levy

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Station Overview

The IRS has requested payment for your tax balance and/or your missing tax returns, but your case has not been resolved and the IRS has continued with its collection process.  In certain circumstances, the IRS may have initiated a civil suit against you or a third party for resolution. When the Department of Justice is given authorization to initiate litigation, it assumes jurisdiction over collection actions including settlement agreements until jurisdiction for collection is returned to the IRS.

This notice or letter may include additional topics that have not yet been covered here. Please check back frequently for updates.

The IRS may pursue the following types of litigation:


Lien Enforcement

A federal tax lien arises when the IRS assesses a tax liability, sends the taxpayer notice and demand for payment, and the taxpayer does not fully pay the debt within ten days of the notice and demand. This is called a ‘silent lien.’ A federal tax lien is effective as of the date of assessment and attaches to all the taxpayer’s property and rights to property, whether real or personal, including those acquired by the taxpayer after that date. This lien continues against the taxpayer’s property until the liability either has been fully paid or the time the IRS can legally collect (statute of limitations) has expired. The government may record a Notice of Federal Tax Lien (NFTL) to enforce the ‘silent lien’. Recording of the NFTL becomes public record. The government may enforce the lien by filing a civil suit against the taxpayer for the unpaid federal tax liabilities. There are a variety of lien enforcement suits available to protect the government’s interest.


Government Files Suit In Court

To bring a suit, the IRS must refer a case to the Department of Justice (DOJ) and request the suit be filed. The IRS considers several factors when determining whether to initiate suit, including the feasibility of administrative collection devices, the statute of limitations, and the potential economic value of the suit. Once the DOJ receives the IRS referral, it can initiate a suit by filing a complaint in the appropriate district court. In addition to suits to enforce a lien, the DOJ may file other types of suits such as a suit requesting the appointment of a court ordered receiver, or a suit requesting an injunction.


Reduce Assessment to Judgement

IRS refers a case to the Department of Justice to initiate a civil suit to reduce liabilities or assessments to judgement. This extends the time that the IRS can collect from a taxpayer’s assets beyond the normal collection period. A suit to reduce an assessment to judgement is one of the more common types of suits filed on behalf of the IRS. It is often paired with a suit to foreclose a tax lien.


Foreclosure of Tax Lien

Once the Department of Justice brings a lien enforcement suit, the court may foreclose the lien on property in which the taxpayer has an interest to convert it to cash and to apply the proceeds to the taxpayer’s liability. A suit to foreclose a lien is commonly filed when the IRS would like the court to resolve the issues regarding ownership of an asset. In these cases, a suit is a better alternative for the IRS than an administrative seizure. The court will sell the property with a clear title to the new buyer.


Action to Enforce Levy

IRS refers a case to the Department of Justice to bring suit against a person who was served a levy and did not surrender the property to the IRS that was listed in the levy.  Any person failing or refusing to surrender property subject to levy can be held personally liable for the value of the property in which the levy attached.  Additionally, if failure or refusal to surrender the property was not due to reasonable cause, the person can receive a penalty of 50% of the amount value of the property, plus penalties and interest.  A suit to enforce a levy is generally brought against a third party, not against the taxpayer (e.g., an employer fails to honor a levy served to reach a taxpayer’s wages).

What does this mean to me?

The IRS has referred your case to the Department of Justice (DOJ). DOJ now has jurisdiction over your case.

How did I get here?

The IRS has requested payment for your tax balance and/or missing tax returns, but your case has not been resolved and the IRS has filed a suit to resolve your case.

What are my next steps?

If you receive correspondence, summons, or notice of litigation, don’t ignore notices from the IRS, DOJ, or court. Even if you can’t pay the taxes you owe, responding to a notice before the due date could prevent more problems. Be sure to keep your address up to date with the IRS so you receive all notices and letters.

You can hire an attorney, certified public accountant (CPA), or enrolled agent to help you if you wish. If your income is below a certain level, you may qualify for Low Income Taxpayer Clinic (LITC) representation.

Where can I get additional help?

Understanding your notice or letter

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If you still need help

The Taxpayer Advocate Service is an independent organization within the IRS that helps taxpayers and protects taxpayers’ rights. We can offer you help if your tax problem is causing a financial difficulty, you’ve tried and been unable to resolve your issue with the IRS, or you believe an IRS system, process, or procedure just isn’t working as it should. If you qualify for our assistance, which is always free, we will do everything possible to help you.

Visit www.taxpayeradvocate.irs.gov or call 1-877-777-4778.

Low Income Taxpayer Clinics (LITCs) are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS. LITCs can represent taxpayers in audits, appeals, and tax collection disputes before the IRS and in court. In addition, LITCs can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. Services are offered for free or a small fee. For more information or to find an LITC near you, see the LITC page on the TAS website or Publication 4134, Low Income Taxpayer Clinic List.


Where am I in the tax system?

Collection Station — Litigation Track