After a period of relative quiet, the IRS has ramped up its collection efforts, and tax professionals are once again seeing a surge in enforcement actions. Understanding the current landscape of IRS collections is essential for practitioners to advise and protect clients effectively. This includes the revived Automated Collection System (ACS), the sequence of collection notices and the mechanics of wage garnishments and bank levies.

After a slowdown during the pandemic, the IRS has shifted back into high gear. If your clients owe back taxes, the risk of enforced collection is higher than it’s been in years. Now is the time to review cases and take action before the IRS does.

Understanding the IRS collection notice timeline

ACS operates on a predictable notice sequence, but it has enforcement behind it. Here’s the path most delinquent taxpayers can expect:

• LT38: Special Reminder Letter

  This letter indicates that IRS collection notices are back in motion. It serves as a warning that follow-up notices and possible enforcement are coming.

• CP501, CP503, CP504: Reminder Notices

  These are issued roughly every eight weeks. They inform the taxpayer of their debt and request payment, but if ignored, enforcement follows.

• LT11: Final Notice of Intent to Levy

  This is the most critical notice. The IRS LT11 notice signals that the agency intends to seize assets, garnish wages or levy bank accounts. Taxpayers have 30 days to respond.

IRS wage garnishments and bank levies are happening now

A wage garnishment is one of the IRS’s most powerful collection tools. After issuing the LT11 and waiting the required 30 days, the IRS can contact an employer and require them to withhold a portion of the taxpayer’s wages to satisfy the tax debt. The amount exempt from garnishment is based on filing status, pay frequency and number of dependents, but the remainder is sent directly to the IRS.

A bank levy allows the IRS to seize funds directly from a taxpayer’s bank account. Unlike ongoing wage garnishments, a bank levy is a one-time event, though the IRS can issue multiple levies if the debt remains unpaid. The bank must hold the funds for 21 days before remitting them to the IRS, giving the taxpayer a brief window to resolve the issue.

Example

Angelica owes $22,000 from tax years 2018 and 2019. After ignoring the LT38 and CP504 notices, she receives IRS LT11. Without a response, the IRS can notify her employer to garnish up to 25% of her paycheck. If she is self-employed, the IRS may issue a bank levy, draining funds directly from her business account. As her tax professional, you can help Angelica by negotiating with the IRS about a payment plan or submitting an offer in compromise, but time is of the essence once garnishment begins.

The good news? Wage garnishments and bank levies can be stopped, but only with immediate action and the right resolution strategy.

Don’t overlook IRS CP508C

In addition to financial enforcement, the IRS may revoke or deny passports for those with seriously delinquent tax debt (over $62,000). The CP508C notice informs taxpayers that their case has been referred to the State Department.

This has major implications for international travelers, contractors and clients in global roles. It’s an enforcement tool that’s gaining more attention and power.

Best practices for tax professionals

• Monitor IRS notices closely:
  Encourage clients to forward all IRS correspondence immediately. Early intervention is key to avoiding enforcement actions.

• Educate clients on the consequences of inaction: Many taxpayers underestimate the seriousness of IRS notices. Make sure clients understand that ignoring the IRS can lead to wage garnishments, bank levies, liens and even passport restrictions.

• Act quickly after LT11:
  The 30-day window after LT11 is critical. File a Collection Due Process (CDP) hearing request if there are grounds to dispute the debt or negotiate a resolution.

• Explore all resolutions options: Depending on the client’s circumstances, consider installment agreements, offers in compromise, or currently not collectible status. Each option has its own requirements and implications.

• Stay informed about special populations:
  Federal employees and contractors face additional risks. The IRS has warned that unresolved tax debts could jeopardize their employment. If you have clients in this category, prioritize their cases and communicate the heightened stakes.

A warm, proactive approach

As tax professionals, our role extends beyond technical expertise. Clients facing IRS collections are often anxious and overwhelmed. Approach these situations with empathy, clear communication and a solutions-oriented mindset. By staying ahead of the IRS’s renewed enforcement efforts, you can help clients avoid the most severe consequences and regain control of their financial lives.

IRS collections are here, so be ready

The IRS’s collection machinery is back in motion, and wage garnishments and bank levies are once again a real threat for delinquent taxpayers. For tax professionals, vigilance, timely action, and client education are more important than ever. By understanding the notice sequence, the mechanics of enforcement, and the available resolution strategies, you can provide invaluable support to clients navigating these challenging waters.

If your clients receive notices LT38, CP501, CP504 or LT11, it’s time to act. Once a levy is in place, recovery becomes more difficult and more urgent.

First comes love, then comes marriage… then comes figuring out how to file your taxes together.

If you recently tied the knot, congratulations! Whether you eloped on a beach or walked down a candlelit aisle, marriage brings plenty of changes, and your taxes are one of them. Here are some practical, IRS-backed tips to help you and your spouse start your married life off on the right (tax) foot.

1. Choose your filing status wisely

After you’re married, your tax filing status is either married filing jointly or married filing separately. You can’t file single anymore. Most couples benefit from filing jointly. In fact, the tax code is set up to encourage it.

To reduce the so-called marriage penalty, Congress structured six of the seven federal tax brackets so that joint filers receive exactly double the threshold amounts of single filers. That means many couples see no increase in tax simply because they got married. Better yet, some couples may even enjoy what’s known as the marriage bonus, especially when one spouse earns significantly more than the other. Combining incomes could pull some of the higher earner’s income into a lower bracket.

The only bracket where this doubling doesn’t apply is the top 37% rate. For tax year 2025, that bracket kicks in at $751,600 for joint filers.

What about married filing separately? It’s not typically beneficial from a tax standpoint. In most cases, you’ll pay more in taxes, and you’ll lose eligibility for various deductions and credits, like the student loan interest deduction and most education credits. However, filing separately may be helpful in specific cases, like when one spouse has significant medical expenses, but for most, it’s worth running the numbers both ways before deciding.

2. Update the IRS and Social Security Administration

If either of you changed your name after marriage, make sure the Social Security Administration (SSA) knows about it. The name on your tax return must match what’s on file with the SSA. If it doesn’t, your e-filed return could be rejected, or your refund could be delayed.

Also, update your address with the IRS and U.S. Postal Service, if applicable. Use Form 8822, Change of Address, to report address changes to the IRS, and make sure your employer has your new address, so your Form W-2 ends up in the right place.

3. Rethink your withholding

Now that you’re married, your combined income may push you into a different tax bracket – or reduce your overall tax liability, depending on your situation. Either way, checking your federal income tax withholding is a good idea.

Use the IRS Tax Withholding Estimator to help decide whether to update your Form W-4, Employee’s Withholding Certificate, with your employer. Both you and your spouse should do this to avoid unpleasant surprises at tax time or accidentally withholding too much.

4. Coordinate tax benefits

Some tax breaks have income limits, like Roth IRA contributions, child tax credits or education credits. These phase out when your joint income hits certain thresholds. Your new household income could affect your eligibility for certain deductions or credits you previously qualified for as a single filer.

Also, remember that there are rules about claiming dependents, especially if one of you has children from a prior relationship. Understanding who qualifies as a dependent is crucial for filing accurately and avoiding delays.

5. Selling a home? You could double your tax-free gain

If you sold a home recently or plan to, you may qualify for a much larger tax break now that you’re married. The home sale exclusion allows up to $500,000 of tax-free profit on the sale of a primary residence for married couples filing jointly (compared to $250,000 for single filers).

To qualify, at least one spouse must have owned the home for at least two of the last five years, and both spouses must have lived in it for at least two of the last five years.

Other smart tax and financial moves for newlyweds

Marriage is about more than just shared finances. Here are a few other areas where combining your lives could require an update:

Update beneficiaries

Make sure to update the beneficiary designations on your retirement accounts, life insurance, and investment accounts. These designations override your will, so it’s important they reflect your new marital status.

Review health insurance options

Marriage is a qualifying life event that allows you to join your spouse’s employer-sponsored health plan or shop for coverage on the marketplace. Compare costs, deductibles, and coverage to choose what’s best for both of you.

Rethink your IRA and Roth strategy

Your joint income could affect your eligibility for Roth IRA contributions. If you’re above the phaseout limits, consider spousal IRAs or explore backdoor Roth strategies with a tax professional’s help.

Notify the Marketplace to avoid premium tax credit surprises

If either of you receives health insurance through the Marketplace, be sure to report your marriage and household income changes right away.

Your premium tax credit (PTC) is based on your projected household income and family size, so going from single to married can significantly affect your subsidy. If you don’t update your account, you may:

• Receive too much credit and owe some back when you file
• Lose eligibility altogether and be underinsured, or
• Miss out on additional savings you are now eligible for

To avoid surprise tax bills or coverage gaps, log into your Marketplace account and update your application as soon as your marital status or income changes.

Understand community property rules

If you live in a community property state, you may need to split income and deductions equally between spouses, regardless of who earned or paid what. Check the rules in your state and consult a professional if needed.

Pay attention to estimated taxes

If you’re self-employed or one of you has side income, your combined earnings could increase your quarterly estimated tax requirements. Don’t wait until next April, adjust your withholding as needed to avoid penalties.

Update or create an estate plan

Marriage changes everything to include wills, powers of attorney and your health care directives. Talk to an estate planning attorney about updating your documents, especially if either of you has children from a previous relationship.

Review your student loans

Getting married can affect student loan repayment, especially if you’re on an income-driven repayment plan. Your spouse’s income may now be factored into your monthly payment, and filing status (joint or separate) can impact how much you owe.

Final thoughts

Marriage changes more than your last name and filing status. Marriage changes your financial future. By updating your records, reviewing your withholding, and planning around new financial realities, you’ll set yourselves up for a smooth transition into married life.

Taxes might not be romantic, but thoughtful planning today means fewer headaches tomorrow and more time to enjoy your honeymoon phase.

Question: James and Olivia file jointly and claim the standard deduction. In 2026, they donated $2,400 in cash to qualified public charities. They have no mortgage interest or other deductions large enough to itemize. Can they deduct any of their charitable contributions? If so, how much tax will they save?

Answer: Yes. Beginning in tax year 2026, married couples filing jointly may deduct up to $2,000 in cash contributions to qualified charities, even if they do not itemize. This below-the-line deduction is available under §170(p), added by the One Big Beautiful Bill Act.

James and Olivia may deduct $2,000 of their $2,400 donations, reducing their taxable income. If their taxable income before the deduction was $100,000, the deduction lowers it to $98,000. Assuming they’re in the 22% tax bracket, this results in $440 tax savings: $2,000 × 22% = $440 tax savings.