IRS Debt Collection Process Now Involves Private Collectors


There you have it. In the effort of the IRS in cooperation with Congress and other lawmaking bodies to collect unpaid taxes, again, they now may use private debt collectors.

The Fast Act

It is under President Obama’s 5-year infrastructure spending bill that they’ve added this provision to the Fixing America’s Surface Transportation Act or the “FAST Act.”

Further, individuals with large tax debt might also have trouble traveling since the FAST Act gave the IRS powers to revoke passports .was also signed into law. It is also part of the FAST Act.

Many would speculate whether this action by the IRS is a good or a bad idea, in the past the IRS have done it twice yet it didn’t give any positive results  or any increase in tax revenue over the last 18 years.

Is it really something to be scared of? One thing’s for sure, if you have the knowledge about your rights, you’ll be prepared in answering those private debt collectors from the IRS.

Private Collectors in the IRS Debt Collection Process

These private collectors will usually notify you via mail with your last known address. Don’t celebrate yet, if you’ve moved into another location. These collectors will search everywhere just to find out your current home address is. They’re good in searching your financial records and other contact details.

Next, these private collectors will contact you via telephone and will request for the full payment of your unpaid taxes. They will also offer you installment terms for up to five years.

This raise concerns for taxpayers because their confidential financial information will be handover to these private collection agencies.

On the hand, it’s to the taxpayer’s advantage that these private collectors cannot accept direct payments. Further, the Fair Debt Collection Practices Act (FDCPA) applies to these private collectors hired by the IRS.

The IRS hires private collectors when the tax bill is:

  • The bill cannot be collected due to lack of IRS resources to locate the taxpayer’s current address.
  • If 1/3 of the statute of limitations has expired and there’s no IRS personnel assigned to collect the bill.
  • The bill has been in collection for more than a year and there’s no interaction between the IRS and the taxpayer involved.

However, some tax bills cannot go to private collectors when:

  • It’s on an active offer-in-compromise or installment agreement with the IRS
  • If the taxpayer involved, is deceased, under age 18, actively designated in a combat zone, or is a victim of identity theft.
  • If the taxpayer is on IRS audit, litigation, criminal investigation or filed a case to the IRS Appeals

Fixing your Tax Bills

You can prevent your tax bills ending up into the hands of private collectors by fixing the problem right away. Financial Rescue LLC can help you with such tax issues. We’ve partnered with tax experts like tax attorneys, CPA’s, former IRS agents and managers that want to share their knowledge on IRS protocols for those who needs help fix their taxes. Call now at 1-877-97-33287 for a free consultation.