Summary
- The IRS temporarily paused many enforcement actions during the COVID-19 pandemic but is now resuming collections with renewed focus.
- Current IRS backlogs and staffing shortages have created unique settlement opportunities for compliant taxpayers.
- Aggressive IRS enforcement measures, including levies and garnishments, are expected to increase in 2025.
- Taxpayers in compliance may benefit from favorable resolutions if they act quickly.
- Having an experienced tax professional can improve outcomes and help navigate IRS procedures.
The IRS and most state taxing authorities radically altered the way they collected unpaid taxes during the COVID-19 pandemic. Simply put, this was by far the kindest and gentlest IRS seen in decades. However—and this is a BIG however—things have already begun to change. For several compelling reasons, now could be one of the best times in recent history for those who owe back taxes to resolve their debts under favorable terms.
The economic crisis that emerged during the pandemic created three powerful converging forces in the world of tax collections. That convergence still has ripple effects, producing special tax relief opportunities for those who act without delay.
First, the IRS halted many aggressive collection tactics, including bank levies, wage garnishments, and asset seizures, during the pandemic. While enforcement actions have gradually resumed, the IRS still faces massive backlogs. As of late 2024, the IRS reported a backlog of more than 17 million unprocessed tax returns and correspondence items (IRS.gov). The result? Cases that might have faced swift enforcement in pre-pandemic times are now progressing more slowly, and the IRS is prioritizing high-risk cases.
Second, the IRS is under immense pressure to collect. In 2023, the IRS reported that the gross tax gap (taxes owed but not collected on time) reached approximately $688 billion (GAO.gov). This means Congress and the Treasury Department are eager to collect as much revenue as possible, as quickly as possible. The IRS collections apparatus is restarting with urgency, which means taxpayers who act soon may still benefit from a more lenient environment before the pace intensifies.
Third, the IRS is overwhelmed. While some IRS personnel have continued working remotely or under hybrid schedules, many offices are struggling to keep up. Staffing remains below pre-2020 levels in key departments, including collections and appeals. Combined with the influx of new tax debts due to economic disruptions, this creates a heavy workload that limits how thoroughly the IRS can review each case. This backlog can work in a taxpayer’s favor—especially if their case is well-documented and handled professionally.
Act Quickly to Seize Unique Tax Relief Opportunities
To understand how these forces create rare opportunities, it’s helpful to look at how the IRS generally assesses taxpayers in collections. For simplicity, taxpayers can be placed into three categories: DEFCON-1, DEFCON-2, and DEFCON-3.
DEFCON-3: High-Risk Taxpayers
DEFCON-3 taxpayers are in immediate danger of enforced collections. These include larger tax liabilities that have been in collections for a while, cases involving recent non-compliance (such as missing recent returns), multiple unpaid periods, or prior defaulted installment agreements. These taxpayers are likely to be among the first targeted as the IRS resumes full-scale enforcement.
DEFCON-2: Moderate Risk
These taxpayers are not in serious danger of immediate enforcement but are at risk if their situation worsens—such as failing to meet a deadline, accruing new tax debt, or becoming noncompliant. These taxpayers can often avoid harsh enforcement by being proactive and taking steps toward resolution.
DEFCON-1: Low-Risk and Eligible for Resolution
DEFCON-1 taxpayers are in the best position. Even if they owe large tax liabilities, they are current with recent filings, compliant with tax laws, and responsive to IRS inquiries. These taxpayers may be able to take advantage of the current environment by negotiating settlements, installment agreements, or penalty reductions that would be harder to obtain in normal times.
IRS Collections Will Resume with Greater Force
While leniency during the pandemic gave taxpayers a temporary reprieve, that era is ending. IRS enforcement activity has resumed, and taxpayers who delay face growing risks. The longer a tax debt remains unresolved, the more aggressive the IRS is likely to become. Taxpayers in DEFCON-3 or DEFCON-2 should take immediate action to move into DEFCON-1.
Tax collectors are going to be swamped. Their priority will be resolving as many cases as possible—as quickly as possible—especially cases that are easy to close. Taxpayers who provide organized, complete financial documentation are much more likely to receive favorable resolutions. In contrast, taxpayers who are noncompliant or unresponsive will face increasingly severe enforcement actions.
The Advantage of Skilled Tax Representation
Having a knowledgeable tax resolution professional on your side is more important now than ever. A good professional can:
- Help taxpayers in DEFCON-3 avoid levies and wage garnishments by quickly bringing them into compliance.
- Guide DEFCON-2 taxpayers toward full compliance to reduce enforcement risks.
- Assist DEFCON-1 taxpayers in securing settlements, installment agreements, or penalty abatement.
In addition, skilled professionals know how to navigate the IRS bureaucracy and make it easier for IRS personnel to approve favorable resolutions.
Why Now Is the Best Time to Act
Taxpayers who are proactive and well-prepared can benefit from the current state of IRS operations. Because the IRS is overburdened, it may be more open than usual to resolving cases quickly. However, this opportunity is temporary. As the IRS rebuilds its enforcement workforce and resolves its backlog, leniency will fade.
Delaying action could mean:
- Missing out on favorable settlement terms
- Becoming a target of IRS enforcement
- Facing increased penalties and interest
If you’re unsure of where you fall on the DEFCON spectrum, now is the time to find out. By acting quickly and enlisting professional help, you can put yourself in a position to resolve your tax problem before enforcement intensifies.
Fortress Tax Relief has caring and experienced professionals on staff who would be happy to evaluate your situation and outline a solution at no charge. If you are facing tax debt and want to know what options are available, don’t wait.
Learn more about our tax resolution services and how we can help.
FAQ: Special Tax Relief Opportunities
Q1: Has the IRS fully resumed enforcement after COVID-19?Â
A: While enforcement actions have resumed, the IRS is still dealing with backlogs and staffing issues. This can provide a temporary opportunity for compliant taxpayers to reach favorable resolutions.
Q2: What IRS programs are available to help me resolve tax debt?Â
A: Options include Installment Agreements, Offers in Compromise, and Penalty Abatement. You can learn more on the IRS website: IRS Tax Debt Relief.
Q3: How do I know if I’m at risk of enforcement?Â
A: If you have unfiled tax returns, unpaid balances, or a history of missed deadlines, you may fall into the DEFCON-2 or DEFCON-3 categories. It’s best to consult a tax professional to assess your situation.
Q4: Can I negotiate directly with the IRS?Â
A: You can, but it is often advisable to use a licensed tax professional who understands the IRS process, deadlines, and documentation requirements.
Q5: Why is acting now better than waiting?Â
A: Acting now allows you to take advantage of current IRS limitations and leniency. Delaying could expose you to enforcement actions and reduced resolution options.
Conclusion
The current tax collection environment, shaped by post-pandemic backlogs and staffing constraints, offers unique opportunities for taxpayers to resolve their debts favorably. However, this window is closing quickly. Enforcement efforts are increasing, and those who wait may find themselves in a far less forgiving environment.
If you have outstanding tax liabilities, now is the time to act. Whether you’re in DEFCON-1 and ready to settle, or facing urgent threats in DEFCON-3, Fortress Tax Relief can help. Contact us today for a free evaluation and take the first step toward resolving your tax issues on the best possible terms.
Visit https://www.taxfortress.com or call us to learn more about how we can assist you.
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