The IRS isn’t giving up its job as the nation’s tax collection agency, but it is farming out
some of the work. Starting this spring, four private contractors will begin helping
collect delinquent tax accounts. The outsourcing was authorized by a law passed
last summer, but this isn’t the first time outsiders have been called on to collect back
taxes. The tactic was tried twice before.
This time, turning debt over to private collectors will be limited to situations when the
IRS hasn’t been able to collect due to a lack of resources or inability to locate the
delinquent taxpayer. The IRS can also turn over the debt when more than one-third
of the statute of limitations has expired and no IRS employee has been assigned to
collect the debt, and when the tax bill has been assigned for collection, but more
than a year has passed without any action.
Private collectors won’t be used in certain cases, such as when an offer-incompromise
or an installment agreement is pending or active. Innocent spouse
cases won’t be turned over either, nor those involving deceased taxpayers,
taxpayers who are under age 18, or who are victims of identity theft.
And what about identity theft and scam concerns? Private collection agencies must
identify themselves as contractors of the IRS. In addition, employees of the collection
agencies are required to follow fair debt collection laws, be courteous, and respect
Treasury Department, not to the private contractors.
If you need assistance getting caught up with back returns, please contact our office.