The IRS recently announced plans to begin private collection of certain overdue federal tax debts as early as the spring of 2017. It has already awarded contracts to four companies to participate in the collection program. Under a law passed in December 2015, the IRS is required to use private collection agencies for the collection of outstanding inactive tax receivables.
Accounts chosen to go to collection agencies include older, overdue tax accounts or where lack of resources prevents the IRS from working the cases. The IRS will not assign accounts to private collection agencies involving taxpayers who are:
Under the age of 18
In designated combat zones
Victims of tax-related identity theft
Currently under examination, litigation, criminal investigation or levy
Subject to pending or active offers in compromise
Subject to an installment agreement
Subject to a right of appeal
Classified as innocent spouse cases
In presidentially declared disaster areas and requesting relief from collection
The IRS is warning taxpayers to watch out for scam phone calls from anyone claiming to be collecting on behalf of the tax agency. Taxpayers should not receive unexpected phone calls from the IRS demanding payment. The IRS sends several collection notices through the mail before making phone calls. In addition, the IRS will give taxpayers written notice that the accounts are being transferred to the private collection agencies and the agencies will send a second, separate letter to the taxpayer confirming this transfer.
The collection agencies must follow provisions of the Fair Debt Collection Practices Act and should be courteous and respect taxpayer rights.
Many taxpayers are not aware of the rights and remedies that may be available to them to help them resolve their tax disputes. If you owe back taxes, contact us for a consultation.