IRS shifts toward collections as levy and passport cases rise

Victory Tax Lawyers says IRS enforcement is increasingly showing up as levies, collection notices and passport restrictions rather than audits. The firm points to 2025-2026 case patterns and IRS and TIGTA data as evidence that taxpayers with unresolved balances are more likely to face collection action first.

Why it matters: - IRS enforcement is becoming more visible in everyday financial life, not just in audit letters. - Taxpayers with unpaid balances face a higher risk of wage levies, bank levies, federal payment offsets and passport restrictions. - A notice can now affect travel, cash flow and business plans before a taxpayer ever reaches an audit stage.

What happened: - Victory Tax Lawyers, LLP says its client matters have shifted during the past several months toward collection notices and passport-related actions. - The firm says audit-related matters have declined relative to collection-driven matters during 2025 and into 2026. - The Los Angeles tax resolution firm says most taxpayers with a balance now first hear from the IRS through collection actions rather than audits.

The details: - Collection actions now include levies on wages and bank accounts, federal payment offsets and passport-related restrictions under the FAST Act. - The IRS Data Book for fiscal year 2024 and recent Treasury Inspector General for Tax Administration reports show the agency closing previously assessed liabilities through collection action rather than starting new audit examinations. - Taxpayers with unresolved liabilities for two years or more appear especially likely to fall into collection-priority cases. - Common notices tied to collection escalation include Notice of Intent to Levy, wage garnishment notices and Notice CP504. - The IRS certifies some tax debts as “seriously delinquent” under Internal Revenue Code Section 7345 and sends Notice CP508C when that happens. - Passport restrictions may not become clear until a taxpayer tries to renew or use a passport. - Those restrictions can disrupt international travel, business obligations and dual-residency arrangements. - Federal tax collection rules under Internal Revenue Code Sections 6321 through 6331 authorize liens, levies and asset seizure for unpaid liabilities. - Taxpayers receiving Notice CP504, CP504B, Letter 1058 or Letter LT11 have 30 days to request a Collection Due Process hearing. - Victory Tax Lawyers represents taxpayers in collection-defense, offer-in-compromise, installment agreement and passport-restriction matters.

Between the lines: - The shift suggests the IRS is working through existing inventory more aggressively instead of relying mainly on audit selection. - For taxpayers, the practical risk is that collection enforcement can arrive faster and with more immediate consequences than an audit. - Passport certification is a separate pressure point because the problem may surface only when travel plans are already in motion.

What's next: - The IRS collections-first posture is expected to continue through 2026 and into 2027 as the agency works through existing case inventories. - Taxpayers with outstanding balances are being urged to review their options before a notice turns into a levy or passport restriction. - Early responses can include a Collection Due Process request and other collection-resolution options.

The bottom line: - IRS enforcement is increasingly about collection leverage, and taxpayers with old balances are more likely to feel that pressure through levies, notices and passport problems than through audits.