Under orders from Congress, the IRS has said that the restart of private collection of certain overdue federal tax debts will begin next spring and has selected four contractors to implement the new program.
The contractors will be required to respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act, the IRS said.
This is at least the third such program, required by a late 2015 budget measure. Prior programs were canceled for reasons including concerns that tax debt collection should be an inherently governmental task, the potential for abusive collection practices, and reticence of taxpayers to cooperate out of suspicion of a scam.
Under the new program, the collection agencies will work only on accounts the IRS is no longer actively working to collect. “Several factors contribute to the IRS assigning these accounts to private collection agencies, including older, overdue tax accounts or lack of resources preventing the IRS from working the cases,” the IRS said.
The IRS will notify taxpayers in writing that their account is being transferred to a private collection agency and will later send separate letter confirming the transfer.
“The IRS will do everything it can to help taxpayers avoid confusion and understand their rights and tax responsibilities, particularly in light of continual phone scams where callers impersonate IRS agents and request immediate payment. Private collection agencies will not ask for payment on a prepaid debit card,” one of the more common techniques used by scammers, the IRS said.
