What Are the Best Options for Resolving Tax Collections Disputes?
Falling behind on taxes can feel overwhelming. Wage garnishments, bank levies, and letters from the IRS can arrive fast and keep coming, even when you’re trying to get back on track. Many people feel stuck between wanting to resolve the issue and not knowing which option actually fits their situation.
If you’re dealing with tax collections, you’re not alone, and there are lawful ways to push back and seek relief under tax law. At Common Law, we help clients in Salt Lake City, Utah, explore practical options for resolving tax collection disputes. If tax debt is hanging over your head, we can help you understand state and federal tax law to pursue outcomes that fit your financial reality. Reach out to us today to talk through your options.
IRS Collection Actions and Why Disputes Arise
Tax collections usually begin after assessed taxes go unpaid. The IRS and Utah state agencies have broad authority to collect what they’re owed, but that doesn’t mean every action they take is correct or final. Disputes often arise when the amount claimed is wrong, penalties were added unfairly, or your current ability to pay wasn’t considered.
Some common collection tools that state and federal agencies use include filing liens against your property, levies on bank accounts, and wage garnishments. These actions can interrupt your daily life and threaten your financial stability. However, you have the right to challenge tax collection activity, especially when procedures weren’t followed or when enforcement creates undue hardship.
In many cases, tax collection disputes aren’t about avoiding responsibility. They’re about getting a fair chance to resolve debt in a way that aligns with the law and your current income. That’s where targeted tax law solutions come into play.
Payment-Based Solutions for Tax Collections
For many taxpayers, the most effective path forward is to make structured payments authorized under tax law. These options can stop aggressive collection actions while giving you room to breathe financially. However, before choosing a payment-based approach, it’s important to look closely at your income, expenses, and long-term feasibility.
Some of the most common options you can use to help resolve collections disputes through payment arrangements in Utah include the following:
Installment agreements: Monthly payments spread over time, which can often help prevent levies and garnishments once approved.
Partial payment installment agreements: Reduced monthly payments based on your level of financial hardship, with the possibility that some debt remains unpaid at the end of the term.
Temporary collection holds: Short-term relief when payment isn’t possible due to job loss, illness, or other financial strain.
Each of these options depends on accurate financial disclosure and proper application of tax law standards. When payment plans are set up correctly, they can turn a stressful collections dispute into a manageable obligation that fits within a realistic budget.
Dispute and Relief Options Beyond Payment
Payment isn’t always the right or only answer. State and federal tax law provide several non-payment remedies that are designed to address unfair or unworkable collection efforts. These options often apply when the debt itself is disputed or when full payment would cause severe hardship.
Before pursuing these remedies, it’s important to gather the necessary documentation and understand your eligibility. Clear records and accurate financial information can directly affect which options are available and how agencies respond to a request for relief. The common relief options that are widely used as dispute and relief tools include:
Offer in compromise: A negotiated settlement for less than the full amount owed when paying in full isn’t realistic.
Penalty abatement: Removal of penalties due to reasonable cause, such as medical issues or natural disasters.
Innocent spouse relief: Protection for taxpayers who shouldn’t be held responsible for a spouse’s tax actions.
Collection due process hearings: A formal challenge against collection actions such as liens or levies.
These options don’t apply automatically, and the burden is often on the taxpayer to show why relief is appropriate. However, when applied correctly, these options can typically provide meaningful reductions and stop enforcement actions that no longer make sense given the circumstances.
Litigation and Appeals When Resolution Stalls
Sometimes negotiations break down, or agencies refuse to adjust their position. When that happens, you still have the right to file an appeal or, in some cases, take the matter to court. However, this stage often involves strict deadlines and procedural rules that must be followed carefully.
Appeals can address errors in collection decisions, rejected settlement offers, or improper enforcement actions. In more serious disputes, litigation may be necessary to assert taxpayer rights and challenge unlawful collections. Working with an experienced attorney during this phase can help keep the focus on legal standards rather than pressure tactics.
While litigation isn’t always the fastest option, it can be the most effective way to restore balance to a stalled collections dispute. Tax law exists to protect both the government’s interests and the taxpayer’s rights, even when tensions are high.
Discuss Your Tax Dispute With a Utah Tax Attorney Today
Tax collection disputes don’t have to define your financial future. With the right approach, state and federal tax law offer multiple paths toward relief, resolution, and stability. Whether the issue involves payment plans, settlement options, or formal appeals, the goal is always a fair outcome that reflects your real circumstances.
At Common Law, we help clients in Salt Lake City, Utah, and throughout Park City, Provo, Ogden, and St. George use tax law to challenge unfair collection actions and pursue workable solutions. If you’re ready to take the next step toward resolving your tax collections dispute, reach out to us today and start the conversation.