By TaxDebtConsultants.com

Let me tell you about something that happened this summer that almost nobody in Redlands knows about.

The IRS changed the rules on people who owe back taxes and own a home. No announcement. No letter in the mailbox. They just rewrote a few lines in the manual their collection officers use every day, and went right back to work.

If you own a home here and owe the IRS money, I want you to read this all the way through. It might be the most important thing you read this month.

Here's What Happened

On June 29, 2026, the IRS revised its Financial Analysis Handbook. That's the part of the Internal Revenue Manual (IRM 5.15.1) that tells revenue officers how to size up what you own, what you earn, and what you can afford to pay.

One new line, in IRM 5.15.1.20(3), says the IRS now expects taxpayers to use the equity in their assets toward what they owe before the IRS considers other options.

Like a monthly payment plan.

Now think about what most Redlands families actually own. A car or two. Maybe a retirement account. And a house they've been paying on for years, sometimes decades.

That house is the asset this change is aimed at.

How I Found Out

I didn't learn this from the IRS. I learned it the way most of us in this business learn the important stuff: from other tax professionals comparing notes.

This week, in a national online forum for people who represent taxpayers before the IRS, one practitioner posted something that stopped me cold.

A California revenue officer had just told him the old way of handling home equity was over.

Here's how the old way worked. You'd apply for a home equity loan. The bank would turn you down, once, maybe twice. You'd hand the denial letters to the IRS. And the IRS would set the equity aside and move on to setting up your payment plan.

According to that revenue officer, that's done. Now the IRS wants the equity first. Borrow against the house or sell it. Then finalize the payment plan.

Another practitioner jumped in to say the same thing had happened to one of his clients. He appealed and won. The client got the payment plan.

It took more than a year.

Now, Here's What This Does NOT Mean

I'm going to be straight with you, because scaring people isn't my job. Helping them is.

This does not mean the IRS can show up next week and make you sell your house. The manual still has protections in it. It still spells out what happens when you apply for a loan and get denied. It still recognizes hardship. It still looks at whether a loan payment would bust your monthly budget.

But here's the thing about protections buried in a manual that runs thousands of pages.

They don't apply themselves. Somebody has to know where they are and ask for them. And the revenue officer working your case is not going to read them to you. That isn't his job.

This also doesn't hit everybody the same. If you owe a smaller amount and qualify for one of the IRS's simpler payment plans, you generally won't go through a full asset review.

The folks with the most at stake are the ones with bigger balances, cases assigned to a revenue officer, and real equity in their home.

Why I'm Telling Redlands About This

I've lived in this area since 1979. I've watched a lot of families buy homes here, raise kids in them, and stay put. Many of those houses are now worth far more than anyone imagined when they bought them.

That's a blessing. Until you owe the IRS.

If you're carrying an old tax balance, maybe from a business that didn't make it, a few years of returns that never got filed, or a retirement withdrawal where nobody held back the taxes, this change is aimed squarely at people like you.

What You Should Do Right Now

• Find out where your case stands. Is it with the IRS's automated system or assigned to a revenue officer? That one fact changes everything.
• Open your IRS mail. Ignoring it doesn't make it go away. Penalties and interest keep piling up, and silence looks like you won't cooperate.
• Don't agree to sell or borrow on the spot. Before you do anything with your house, find out what the manual actually requires in your situation.
• Know you can appeal. If the IRS turns down a payment plan, you can challenge it through the Collection Appeals Program using Form 9423. The deadlines are short, so don't sit on it.
• Talk to someone who handles IRS collections. An Enrolled Agent, CPA, or tax attorney who does this work can tell you where you really stand.
  
  

Here's the bottom line.

The rule changed in June. Most people who owe the IRS still have no idea.

Now you do. And that puts you ahead of almost everyone else in the same boat.

Carlos Samaniego is an Enrolled Agent and founder of Tax Debt Consultants LLC in Redlands, which represents taxpayers in IRS and California FTB collection matters. He has lived in the Redlands area since 1979. You can reach his office at 909-570-1103.