Georgia residents with overdue bills are likely aware that the activities of debt collectors can sometimes border on harassment, and they could be alarmed to learn that four private companies have been authorized to pursue unpaid taxes on behalf of the Internal Revenue Service. The Sept. 26 IRS announcement stated that these contractors would respect the rights of taxpayers and abide by the provisions of the Fair Debt Collection Practices Act, but these assurances may not be enough to calm the fears of consumer and taxpayer advocacy groups.
The announcement did not go into details about how the private contractors will go about pursuing outstanding taxes that the IRS does not have the resources to collect, and many of the traditional practices of debt collectors, such as calling the residences of debtors, are listed on the federal agency’s website as signs of a potential scam. The agency says that taxpayers will be notified by letter when their account has been turned over to a private company for collection to avoid this kind of misunderstanding.
It is not uncommon for phone scammers to call taxpayers posing as IRS agents, and the agency accepts that using private debt collection companies could create confusion and provide opportunities for future fraud. However, the agency points out that even though private businesses will be pursuing unpaid taxes, they will not be authorized to actually collect any money. All tax payments will continue to be made to the IRS directly.
Simple bookkeeping errors or unexpected setbacks can leave individuals owing thousands of dollars to the IRS with no way to make good on the debt, and the agencies collection efforts are sometimes relentless. When taxpayers are faced with their assets or bank accounts being seized or their wages being garnished, experienced tax attorneys may negotiate on their behalf with the IRS. Attorneys could argue that the accounts of taxpayers with serious financial problems be classified as currently not collectible, or they could make an offer in compromise when the taxpayer involved has a limited amount of disposable income.