The IRS announced today it will launch private collection of certain overdue federal tax debts next spring and has selected several contractors to implement the problem. See full announcement.
Here are ten things you should know about this new program:
- First, the private collector usually will contact the taxpayer by letter.
- If the taxpayer’s last known address is incorrect, the private collector searches for the correct address. Next, the private collector will telephone the taxpayer to request full payment.
- If the taxpayer cannot pay in full right away, the private collector offers an installment deal for up to five years.
- If the taxpayer is unable to pay even over five years, the collector asks for taxpayer financial information to see what sort of deal the taxpayer should get. There are controls on financial data, but there is considerable worry about having taxpayer data in private hands.
- Private collectors cannot accept payments. Do not pay them directly!
- The Fair Debt Collection Practices Act applies to private collectors. This is the same law that applies to collectors in other circumstances.
- There are many reports required under the law. Congress and the Treasury Department are trying to determine if private collection is efficient and how well it works.
- In some cases, the IRS is actually required to use private collectors, where:
- The tax bill is not being collected because of a lack of IRS resources or the IRS’ inability to locate the taxpayer.
- More than 1/3 of the statute of limitations has expired, and no IRS employee has been assigned to collect it; and
- The tax bill has been assigned for collection, but more than a year has passed without any interaction.
- Some tax bills cannot go to private collectors, as where:
- There is a pending or active offer-in-compromise or installment agreement;
- It is an innocent spouse case;
- The taxpayer is deceased, under age 18, in a designated combat zone, or is a victim of identity theft;
- The taxpayer is under IRS audit, in litigation, criminal investigation, or levy; or
- The taxpayer has gone to IRS Appeals.
- If you have a large tax debt, you might also have trouble traveling, since the IRS power to revoke passports was also signed into law. It is also part of the FAST Act. We think of passports as being needed only for international travel, but some people may find that passports are also required for domestic travel in 2016.
Overall, the IRS can still be scary for many taxpayers. That’s why it’s crucial for you to do your homework and find a qualified IRS tax relief professional like Ron Friedman Tax Relief Pro. All tax resolution matters require IRS forms, documentation and situational analysis. At Ron Friedman Tax Relief Pro, we’ve proven our expertise and have gotten taxpayers to settle their debts in a convenient and affordable manner.
We encourage you to contact us for your FREE no-obligation confidential consultation.
Till next time,
As the best tax resolution and relief company in Westchester County, NY, and the tri-state area, Ron Friedman Tax Relief Pro has specialists to stop the IRS and help troubled tax payers get out of IRS debt. If you have back taxes owed, unfiled tax returns, IRS levies, liens, seizures or wage garnishments, we at Ron Friedman Tax Relief Pro can help you settle for a fraction of what you owe. As trusted, credible tax resolution specialists, we are vested in our client’s well-being and financial security.