In years past, the Internal Revenue Service (IRS) has never called taxpayers to collect back taxes. However, beginning this month, the IRS will use four private collection firms to deal with severely delinquent cases. Although this new strategy is said to be in place to help alleviate stress and prevent harassment for taxpayers they have experienced in the past, I believe this change may be an attempt to improve the IRS’s budget. And, this policy change comes at further costs to the tax payers.
Collection companies employ aggressive collection tactics that can at times be borderline abusive and this policy would further degrade taxpayers’ perceptions of the IRS. The IRS has attempted this strategy of using private collectors previously and each time they have needed to stop the project. Not only were taxpayers being abused, but the project ended up costing money due to high administrative costs and commissions to debt collectors. In 2006, the project lost over $2 million.
This looks like another instance where the IRS needs to count the cost of their policies for taxpayers, considering reductions to their operating budget, the IRS has also been cutting back on services to taxpayers. For example, when calling the IRS Help Line, taxpayers are required to wait on hold for an extended duration. In fact, over 60% of taxpayers could not get through to the IRS at all and 49% of correspondences were not handled in a timely manner. In our 30+ years of experience in dealing with the IRS, we have been able to successfully help our clients resolve issues with the IRS in a constructive and dignified manner, without the need to employ debt collection agencies. We look forward to the day when the IRS can improve the ways in which it reaches out to taxpayers.
Below are some commonly asked questions about this new policy:
1. How will I be notified if this new debt collection policy if applies to me?
The IRS will notify you only through post mail and they will not call you directly or send you an email. The only alternative form of correspondence confirmed has been via fax. The IRS stated they would be mailing out advisories of their new policy for debt collection, so beware of any communications you may receive outside of mail or fax, as this is probably is not the IRS contacting you. By calling the IRS with your case ID number, you can also validate the existence of the matter with IRS.
2. Should I Do Anything Right Now In Anticipation of the New Policy?
For those who have not worked out a compromise or plan to pay down balance due to the IRS, this new policy would serve as the impetus to do so as soon as possible. Those who have unresolved balances should be expecting IRS debt collectors to contact them in response to this new policy.
3. What are Some Tips on How to Handle IRS Debt Collectors if I’m contacted?
Our best advice would be to seek the guidance of a tax professional, as soon as possible, to help you resolve your current tax issues. Resolution of your tax problems is the best way for you to get back on track and focus on your business and life, with any tax issues resolved.
For more information about this important new IRS Policy, please contact IRS Problem Solvers at 877-676-5837 or email us at [email protected].