Just a mention of the Internal Revenue Service seems to instill fear in the hearts of many. Debt collectors are thought of as an annoyance that savvy debtors have learned to avoid by the use of caller ID. Now just imagine if the IRS and debt collection agencies joined forces.

This scenario is now a reality. On September 26 the IRS announced that starting in Spring 2017 it will roll out a new program to collect overdue taxes on accounts which are currently inactive. Pursuant to authority granted by Congress last December the program allows designated private collection agencies to collect delinquent taxes on behalf of the IRS. Four agencies have been chosen for this task.

The collection agencies must respect taxpayer rights, be courteous and abide by the Fair Debt Collection Practices Act. Because we know collection agencies would never violate the FDCPA, right?! The potential for scammers to defraud taxpayers by impersonating collection agencies claiming to be working on behalf of the IRS should be readily apparent. With thIs in mind the IRS has taken steps to address this issue.

First, the IRS will send written notification to the taxpayer that his/her account is being transferred to a private collection agency. If the taxpayer has appointed a representative, the notification will also be sent to the representative. Second, the collection agency will send the taxpayer and his/her representative a second letter confirming the transfer of the delinquent tax account.

It is important to know that the private collection agencies will not ask that payment be made on a prepaid debit card. In fact, the collection agencies will not receive any payments on behalf of the IRS. All payments will be made by check payable to the US Treasury and sent directly to the IRS or made electronically on the irs.gov site. This is another protection mechanism against potential scammers.

Please call my office if you want additional information regarding the program or the identity of the four collection agencies which will be involved in this program.