Since its creation the Internal Revenue Service has been solely responsible for collecting taxes from American taxpayers. In the past, the IRS has been unable to contact many taxpayers with balances owing because of its shortage of manpower and collection programs.
However, the IRS has promised to increase collection efforts by privatizing a portion of the debt collection. Specifically, the IRS will use private debt collection agencies to collect unpaid taxes from clients. Even taxpayers with the smallest balances may now be contacted by the IRS or the IRS’ private collectors because the IRS will now have more collection representatives and resources at its disposal.
In the past, thousands of taxpayers have been able to avoid collections because the IRS was understaffed or their tax account was too complicated for the average IRS representative. However, the IRS will now have additional manpower to free up more time for them to search for and levy taxpayers from low balance accounts to complicated cases. Also, it is anticipated that the IRS will use its newfound capabilities to scrutinize more federal tax returns and to more efficiently research complex income matters.
As part of the collection process, the IRS has stated that it will provide private debt collection agencies with taxpayers’ private information (including the name and social security number of a taxpayer’s spouse, and the address and phone number of taxpayers) to ensure that collection efforts are maximized. The IRS’ private debt collectors will contact taxpayers to collect balances owed and to inform taxpayers of their need to file delinquent tax returns.
Taxpayers that delay or refuse to talk to the IRS private debt collectors are running the risk of collection activities, including tax liens, IRS levies and wage garnishments. Taxpayers should actively seek representation from a qualified tax professional to prevent and neutralize collection action from the IRS.