Monthly CPA Newsletter : September-2026
September 2026 D Tax Accounting | CPA & Advisor Newsletter
The IRS Has Rewritten IRM 5.15: What CPAs Must Know About the New Collection Rules
The IRS has quietly implemented one of the most significant shifts in collection policy in decades. The July 2026 revision of IRM 5.15 fundamentally changes how Revenue Officers (ROs) evaluate taxpayers, enforce collection, and determine ability to pay.
These changes affect every CPA with clients who owe back taxes, especially those with payroll liabilities, business debts, or unresolved notices.
Below is a concise breakdown of the most important updates — and what they mean for your practice.
1. Revenue Officers Now Have Expanded Authority
The new IRM gives ROs far more investigative power than before. They are now instructed to:
Conduct deeper financial analysis
Request liquidation of assets before considering payment plans
Perform site visits, home visits, and drive-by inspections
Push for immediate payment when assets exist
Pursue more seizure opportunities
From the IRM:
“New changes give Revenue Officers more ‘teeth’... more seizure opportunities.”
Why this matters: Clients who previously qualified for installment agreements may now face asset liquidation demands first.
2. Installment Agreements Are No Longer the First Option
Speed matters if a tax practice suspects that taxpayer information has been stolen.
The IRS recommends that affected tax professionals contact their local IRS Stakeholder Liaison to report the incident. Prompt reporting can allow the IRS to take steps to help prevent fraudulent returns from being filed using stolen client information. Tax professionals should also follow applicable state data-breach reporting requirements.
What Should CPA Firms Do Now?
The IRS recommends that tax professionals review their security practices and remain especially cautious when receiving unexpected requests for information or access.
Key steps include:
Use multi-factor authentication wherever available.
Train employees to recognize phishing and spear-phishing attempts.
Verify unexpected requests from clients before opening attachments or clicking links.
Protect EFINs, PTINs, CAF numbers and other professional credentials.
Keep antivirus, firewalls and other security protections current.
Maintain secure backups of important business and client information.
Review and update the firm's Written Information Security Plan (WISP).
A WISP is not optional. Federal law requires tax professionals to create, implement and maintain an information security plan designed to protect client information. The IRS notes that the plan should be appropriate for the size, complexity and sensitivity of the firm's operations.
3. Mandatory Site Visits and Lifestyle Verification
ROs are now required to physically verify assets and observe lifestyle indicators.
This includes:
Business site inspections
Home visits
Vehicle inspections
Drive-by observations
Verification of luxury items, boats, planes, and stored assets
From the IRM:
“ROs can conduct scheduled or no-contact field visits... observe the taxpayer’s home and vehicles.”
Impact: Clients must be prepared for in-person IRS contact — something many have never experienced.
4. Lifestyle, Economic Reality, and Financial Status Audits Are Now Standard
The IRS is expanding lifestyle audits beyond examinations and into collections.
ROs will now:
Review bank deposits for undisclosed income
Examine Venmo, Zelle, CashApp activity
Identify roommates or household contributors
Analyze digital assets
Compare lifestyle to reported income
From the IRM:
“Search for Venmo, Zelle, Cash App... for incoming regular payments to be labeled as income.”
Impact: CPAs must prepare clients for probing questions and deeper financial scrutiny.
5. IRS Can Adjust Officer CompensationThe IRS is expanding lifestyle audits beyond examinations and into collections.
A major change for corporations: ROs can now determine whether officer wages are “excessive” and add back amounts to increase collectible income.
From the IRM:
“Excessive compensation added back to income... use allowable living expense standards as a guide.”
Impact: S-Corp and C-Corp clients may face challenges if officer wages are not aligned with IRS expectations.
6. New Asset Valuation Standards Increase Collectible Equity
The IRS now uses multiple valuation tiers:
FMV – 100%
QSV – 80% (quick sale)
FSV – 75% (forced sale)
RFSV – 60% (reduced forced sale)
From the IRM:
“Reduced Forced Sale Value 60% or more of FMV.”
Impact: These valuations increase the taxpayer’s “ability to pay,” making CNC and OIC harder to obtain.
7. Life Insurance Policies Can Be Treated as Collectible Assets
The IRS may now consider the secondary-market value of life insurance policies — even when cash surrender value is low.
From the IRM:
“A viatical settlement may be worth up to 50% of the death benefit.”
Impact: Older or medically fragile clients may be pressured to sell policies to satisfy tax debt.
8. ACS Is Now the Safe Zone – RO Cases Are the Danger Zone
The presentation emphasizes:
“Resolve with ACS to avoid empowered Revenue Officers.”
Impact: CPAs should encourage clients to resolve balances early, before cases are assigned to ROs.
What CPAs Should Do Now
1. Review all clients with outstanding balances
Especially those with payroll liabilities, business debts, or unfiled returns.
2. Prepare clients for more aggressive IRS behavior
Site visits, lifestyle audits, and asset liquidation requests are now standard.
3. Update your internal procedures
Representation now requires deeper preparation, more documentation, and proactive defense of business expenses.
4. Educate clients early
Surprises lead to panic — preparation leads to resolution.
The presentation emphasizes:
“Resolve with ACS to avoid empowered Revenue Officers.”
Impact: CPAs should encourage clients to resolve balances early, before cases are assigned to ROs.
Final Thought
The July 2026 IRM 5.15 overhaul marks a major cultural shift inside IRS Collections. Revenue Officers are now empowered, coordinated, and instructed to pursue assets aggressively.
For CPAs, this means:
More work
More complexity
More need for specialized tax resolution support
But it also means an opportunity to protect clients before enforcement escalates.
