IRS hires private debt collection agencies to collect unpaid taxes

You won’t just be receiving a call from the Internal Revenue Service (IRS) moving forward, but also from debt collectors. The tax collection agency has contracted out the task of pursuing unpaid taxes.

The IRS announced earlier this month that it has hired four debt collection agencies to get their hands on outstanding payments from taxpayers. With the increasing backlog of unpaid taxes, the IRS employed private debt collection firms to contact taxpayers who still haven’t paid previous years’ taxes.

As part of the new debt collection program, a few hundred taxpayers will be receive phone calls and mailings. In the summertime, the number will grow by the thousands.

Ostensibly, the IRS will contact these people several times before they send their information to a private debt firm. Moreover, the IRS will not provide accounts to these agencies in regards to victims of tax-related identity theft, minors and those in combat zones.

“The IRS is taking steps throughout this effort to ensure that the private collection firms work responsibly and respect taxpayer rights,” said IRS Commissioner John Koskinen in a statement. “The IRS also urges taxpayers to be on the lookout for scammers who might use this program as a cover to trick people.”

In addition, the private debt collectors must abide by the Fair Debt Collection Practices Act. But not everyone is satisfied.

Tony Reardon, president of the National Treasury Employees Union, thinks the collection agents will be getting paid to “harass taxpayers, many of whom need assistance…”

Chi Chi Wu, staff attorney with the National Consumer Law Center, says private debt collectors are the most complained about to the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB).

“The collectors don’t have any incentive to do that because they get paid a commission for every dollar they bring in. Their main incentive is to collect money, come hell or high water,” Wu said “We’re concerned that some of these vulnerable taxpayers will agree to pay more than they can afford and more than they should be paying given the availability of these programs.”

The private sector will now use the arm of government force to retrieve the fruits of your labor.

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