Engagement workflow and escalation ladder
flowchart LR
A[Identify debt case\n(balance, periods, status)] --> B[Segment
taxpayer\nability/willingness/risk]
B --> C[Choose channel + message\nletter/SMS/portal/phone/in-person]
C --> D{Taxpayer responds?}
D -->|Yes| E[Diagnose barrier\ncashflow? capability? dispute? hardship?]
D -->|No| F[Reminder + nudge\n(social norms / friction reduction)]
E --> G[Negotiate resolution option]
G --> H[Document agreement\nterms + monitoring plan]
H --> I[Monitor compliance\nmissed payment? new debt?]
I -->|Compliant| J[Close case\n+ prevention education]
I -->|Non-compliant| K[Escalate proportionately\n(set-off, lien/levy steps
where lawful)]
Negotiation “products” and when to use them
Payment plan / installment agreement.
Teach as the default solution when the debt is collectible over time and
compliance posture is reasonable. IRS materials describe installment agreements
as payment plans and highlight that requesting a plan can affect levy
restrictions and timing while pending.
HMRC’s Time To Pay is framed as tailored arrangements for customers who cannot
pay on time.
CRA provides a “payment arrangement” path for paying a debt
over time.
Compromise/settlement for less than full amount.
In the U.S. model, the IRS offer in compromise is an agreement that settles a
tax debt for less than the full amount owed, subject to eligibility and
conditions, supported by Form 656/656‑B materials.
In other jurisdictions, compromise authority may exist but is more constrained
or formal; Wilkinson illustrates the UK constitutional constraint that
administrative discretion cannot override clear statutory rules.
Temporary delay / hardship status.
The IRS explains that if it determines the taxpayer cannot pay any of the debt,
it may report an account “currently not collectible” and temporarily delay
collection until the taxpayer’s financial condition improves.
CRA publishes hardship support and encourages taxpayers to contact CRA to
discuss deferral, arrangements, or relief options.
Penalty/interest relief (where available).
CRA’s taxpayer relief provisions include cancellation/waiver of penalties or
interest, with RC4288 as the request form and
published criteria/process.
These are jurisdiction-neutral teaching templates; adapt to
local law, process, and approved forms.
Template letter: “First balance engagement + channel shift”
(service-forward).
Key design: (a) right-to-be-informed style clarity (TBOR/HMRC Charter/CRA Bill
of Rights), (b) one clear call-to-action, (c) credible consequences, (d) options
menu.
1) Balance summary (tax type, period, amount as of date)
2) What you can do now (Pay in full; Payment plan;
Hardship/temporary delay request; Discuss/appeal
if eligible)
3) How to act (portal link, phone, pay-by-date)
4) What happens if you do nothing (interest/penalties; potential enforcement steps
where lawful; remind of rights and review pathways)
Anchors for the “options menu” include IRS payment plans, IRS hardship/temporary
delay, CRA payment arrangements, and HMRC “if you cannot pay” guidance.
Call script: “Diagnosis → proposal → agreement.”
1) Opening/identity + tone:
“Thank you for taking the call. My goal is to help you resolve the balance in a
way you can sustain, while keeping you informed of next steps.”
2) Diagnostic questions (minimum set):
- “Is the balance amount clear to you?” (right to be informed principle)
- “Is the issue ability to pay now, or do you dispute the amount/period?”
- “Do you have any urgent hardship factors affecting basic living/operating
costs?” (to triage hardship path)
3) Offer resolution options:
- Payment plan / installment agreement: explain term lengths,
expected affordability assessment, documentation needed (income/expenses).
- Temporary delay/hardship: explain meaning (“debt doesn’t go away”), and
required financial review.
- Compromise/settlement: explain eligibility constraints and compliance
obligations.
4) Close and confirm:
- Confirm amount, payment date, method, monitoring, consequences of missing
payments.
- Send written confirmation.
Payment plan agreement template (minimum terms).
- Parties + case ref
- Recognized debt amount (as of date)
- Payment schedule and due dates
- Ongoing compliance condition (file/pay new liabilities on time)
- Default triggers + cure period
- Review clause (change in circumstances)
- Documentation list (financial statement, bank proof, etc.)
This aligns with how IRS describes the payment plan process and
how HMRC frames Time To Pay as tailored to ability-to-pay.
Hardship application template.
- Statement of hardship (events, timeline)
- Monthly income/essential expenses and evidence
- Assets/liabilities summary
- Proposed interim plan (if any partial payment possible)
- Request: temporary delay / alternative arrangement / penalty-interest
relief (as legally available)
Anchors: IRS “temporarily delay collection” (CNC) and CRA hardship support and
cancellation/waiver relief mechanisms where applicable.
