IRS to Stop Unannounced Visits to Taxpayers

T he Internal Revenue Service (IRS) announced in late July that it will stop its practice of making unannounced personal visits to the homes and businesses of delinquent citizens to collect taxes. The change focuses only on the practice of Revenue Officers (ROs) making such calls, as explained in more detail below, and it will not affect other agents of the IRS. The sole job of an RO is to collect delinquent taxes, and in some cases to secure unfiled tax returns.

What does this change mean for taxpayers? Well, not much, really. In most cases, delinquent tax accounts are handled by the IRS’s Automated Collection System (ACS). ACS is responsible for annually mailing tens of millions of tax delinquency notices, levy notices, and federal tax lien notices. ACS operates several call sites that field incoming calls from citizens who receive such notices. ACS has the ability (within certain limits) to work with citizens to get their delinquent accounts resolved, release levies, and establish installment-payment agreements.

When a case exceeds a certain dollar amount, usually $100,000, the IRS assigns an RO from a local IRS office to work the case. ROs also work delinquent employment tax cases involving unfiled employment tax returns and unpaid employees’ withholding taxes. An RO can issue collection notices, levy assets, and file federal tax liens. ROs also carry out investigative actions, such as issuing summonses to banks and third-party payers, to track a delinquent taxpayer’s income sources.

Once assigned a case, the first job of an RO is to make contact with the taxpayer. Most often, that contact is in writing. An RO’s letter reminds the taxpayer of the delinquency and asks that the tax be paid in full, or the missing returns filed, by a certain deadline. If the taxpayer is unable to meet the deadline, he is encouraged to reach back to the RO to discuss alternatives. Very often, the first letter mailed by an RO is a Final Notice, Notice of Intent to Levy, and Notice of Your Right to a Hearing, IRS Letter 1058. This notice is required by Internal Revenue Code section 6330, the provision that allows a citizen to request a Collection Due Process hearing within 30 days of service of the Final Notice letter.

If the RO decides that she will make personal contact with the taxpayer, she does so by driving to the taxpayer’s home or office. Her intent is to introduce herself, explain the collection process, and to personally serve the Final Notice (rather than mail it). I have no doubt that ROs are under no delusion that they will collect the tax in full on the first visit.

Imagine this conversation growing from an unannounced visit:

RO: “Good morning, Mr. _______. My name is ______. I’m from the IRS and I’m here to collect the delinquent tax you owe.”

Citizen: “Yes, I’ve been thinking about taking care of that. How much do I owe?”

RO: “$130,000.”

Citizen: “Hold on a minute. I’ll get my checkbook.”

I have news for you, friends, that doesn’t happen.

So rather than returning to the office with a check, the RO leaves the citizen with the Final Notice, certain IRS publications about taxpayer’s rights, and a form called an Information Document Request, which is a formal request for detailed financial data the RO requires in order to consider alternatives to enforcement. By the way, that is exactly the same information that’s mailed out by ACS, and in the majority of cases in which ROs opt not to make the first contact a personal visit.

So why make personal visits at all? In the case of delinquent taxes, the IRS knows it’s likely not getting the money. But it also knows it needs to get the citizen’s attention. The personal visit puts the taxpayer on notice — in a very real way — that attention must be paid to the problem or things will quickly go from bad to worse. A letter in the mail simply does not generate the same “pucker factor” as a knock on the door does.

The reason given by Commissioner Danny Werfel for stopping the visits was vague. His announcement states that “changing this long-standing procedure will increase confidence in our tax administration work and improve overall safety for taxpayers and IRS employees.” What he means by either element of his statement is unclear. Why does it increase one’s confidence in the system to receive a Final Notice or federal tax-lien-filing notice in the mail versus receiving one via personal service from an RO? Either way, you’re on notice from the IRS that the string is out and collection is proceeding in full force, and either way, you have collection appeal rights.

And what does he mean by suggesting they are “improving overall safety for taxpayers and IRS employees”? Is he saying that personal visits lead to shoot-outs between IRS employees and delinquent citizens? There is no evidence of such a thing ever happening. Besides, ROs don’t carry firearms.

The National Treasury Employees Union (NTEU) weighed in on the policy change, issuing a statement that is utterly absurd. NTEU’s national president Tony Reardon claims that the jobs of tax collectors

have only grown more dangerous in recent years because of false, inflammatory rhetoric about the agency and its workforce. We applaud Commissioner Werfel’s quick action after hearing the safety concerns raised by NTEU leaders and IRS Field Collection employees who faced dangerous situations that put their safety at risk. We look forward to working with the IRS on this and other actions to protect the safety of all IRS employees.

Again, there is no evidence that ROs are targeted for violence when they make personal visits to citizens’ homes and businesses. The alleged “false and inflammatory rhetoric” about the agency is a reference to the open and heated debate about whether the IRS should have gotten supplemental funding of over $80 billion to hire 87,000 additional IRS employees. To the extent that Reardon suggests that no such debate should have occurred, that position is entirely predictable coming from the head of a government labor union. I’m sure Reardon would support the hiring of 187,000 more IRS employees.

It is important to note that the policy change discussed here will not affect either revenue agents (RAs; tax auditors) or special agents (criminal investigators). RAs don’t make unannounced personal visits under any circumstances. All meetings in connection with audits, including the initial conference, are scheduled with the joint consent of the RA and the taxpayer in question.

Special agents, on the other hand, make unannounced visits as a routine part of their work. They do so to serve summons and subpoenas and to interview potential witnesses — including the citizen under investigation. They also do so to serve search warrants, such as they did on June 14, 2023, in Great Falls, Mont. That’s when 20 heavily armed IRS special agents seized dozens of boxes of documents from Highwood Creek Outfitters, a sporting-goods store and gun dealership. While certain members of the Senate Finance Committee expressed concern to Commissioner Werfer about such actions, the new IRS policy will not affect these raids.

Moreover, unannounced visits by ROs will still take place when ROs serve summonses or subpoenas and when they are involved in the seizure of assets.

The bottom line is that the new policy will not have any effect on taxpayers’ rights. In any collection situation, you still have the right to a final notice before levy and notice of filing a tax lien. In either case, you enjoy your collection due process appeal rights. This doesn’t change whether the notices were served personally or through the mail.