IRS Turns Over Tax Debt Collections – How Will It Turn Out?

Tax and Financial News

IRS Turns Over Tax Debt Collections – How Will It Turn Out?

Bundled in with a 2015 law, Congress gave the IRS a directive to give private debt collection agencies the task of collecting certain types of delinquent tax debt. This isn’t a first; in fact, a similar tactic was attempted about two decades ago resulting in a myriad of complaints about harassment and dubious collection practices. Another stab at private collection was again attempted during George W. Bush’s tenure in office and yielded similar results.

Next Time’s the Charm?

Why would the government attempt a similar program if it failed multiple times before? One of the problematic issues as noted by National Taxpayer Advocate Nina Olson relates to the potential for collection given that almost 80 percent of these tax debts are due from taxpayers with incomes under the poverty threshold. You can’t squeeze blood from a stone and no amount of calling or threatening is going to produce results from those who simply cannot pay. Regardless, the program is moving forward and here is how it works.

How the Program Works

Taxpayers who have an overdue tax bill that falls under the program will receive a letter from the IRS before the account is transferred to a debt collection agency. This letter lets the taxpayer know which of the four authorized agencies their account is being assigned to and will include an IRS publication giving more information about what to expect and how the program works. A letter from the collection agency will follow after this.

Debt collectors are allowed to say they are collecting on behalf of the Internal Revenue Service (but are not required to). Collection agencies must follow fair debt collection practices, meaning they must be courteous and respect your rights as a taxpayer. In practice, this means debt collectors can’t call you early in the morning or late at night or threaten you.

The debt collector can discuss payment plans and agreements, but remember that any and all payments must be sent directly to the IRS. Never pay the tax debt collector. Electronic payments using a debit or credit card should be made only through the IRS payment system – never give your card number to a debt collector.

You also should know that debt collectors cannot place a lien, issue a levy or threaten you with arrest or charges of deportation. The IRS saves these actions for in-house staff. Understanding these details are important so you can protect yourself from scams and theft.

Beware Scammers

Not sure if you owe the IRS any money? You can easily check online to verify anything a debt collector is telling you by visiting the official IRS’ website at Look up your account on the site; if the balance says zero and you are hearing from a debt collector about tax money owed, this should be a red flag. Generally, you won’t receive a phone call from a private debt collector unless you have older unpaid tax bills that go back a few years. You’ll almost certainly already have been contacted by the IRS multiple times as well.


If you owe the IRS a tax debt, be aware that the agency now has more resources available to chase you down; however, most people in a position to be sent to one of the new private debt collectors already know they have an issue. Remember that as we transition to this program, it will be ripe with opportunities for fraud by scammers. The best way to protect yourself is to understand your rights and how the program works.




General Business News

When is It Necessary to Hire a Business Development Consultant?

Even the best performing businesses have room for improvement. That’s where a business development consultant can come in. Whether it’s for public relations, editorial services, training or another part of a business’ overall strategy, business owners can take advantage of what consultants offer.

What Do Business Development Consultants Do?

Business development consultants offer business owners and their officers a fresh perspective on important business decisions. Examples include whether it’s better to make a product in-house or purchase it wholesale from a supplier. Other potential uses for a consultant include taking a different approach to training; increasing worker engagement; improving employee-to-employee communication; or effectively restructuring compensation and benefits for workers.

Consultants Looking at the Root Cause of Inefficiencies

A consultant can add value to each project by looking into the true cause of problems, not merely symptoms. Business development consultants who explore what may have worked temporarily or what approaches have failed in the past can provide insight into how the company is failing to address the cause of the primary problem.

Providing Value Beyond the Immediate Need

Consultants don’t just provide solutions to acute problems. Business development consultants also help clients develop systems to work through future roadblocks, such as making the wrong hires or correcting supervisors and employees with less than ideal behaviors.

One example is when a series of poor candidates are hired within an organization. After the intake of a candidate’s resume and a preliminary questionnaire or self-assessment, the problem could lie in how in-person interviews are conducted.   

When it comes to creating an interview for candidates, if the organization focuses too much on getting as many points of view as possible, it may unintentionally lead to selecting a candidate who is not the best fit. By obtaining the input of multiple people, accomplished through a group interview, a desire for uniformity takes precedence over choosing the best candidate for the role. A business development consultant might suggest a different way to hold interviews that would be more effective for temporary and long-term staffing.

One way a consultant may try to fix a spate of bad hires is to have potential employees interview with the immediate supervisor. Once a primary candidate is selected by the department supervisor, he or she may participate in a final group interview for the organization’s confirmation.

This example demonstrates how an organization can work with a consultant over a set period of time, and then apply his recommendations going forward once the consultant is gone. The new interviewing method can be tested to see how an initial one-on-one screening with the hiring manager may improve performance of newly hired candidates versus a group screening model. It can allow an organization to improve its interviewing process based on a trial-and-error results.




What’s New in Technology

What Impact Will the Repeal of Online Privacy Laws Have on You?

The recent repeal of an Obama-era law that would have required Internet Service Providers (ISPs) to obtain users’ permission before sharing their personal data with marketers and other third parties has created dissent within the technology sector. Not surprisingly, major ISPs like AT&T and Comcast backed the repeal effort, arguing that the law was unfair and that they would have been subject to stricter controls than companies like Facebook and Google. Consumer advocates believe the repeal will be detrimental to online privacy.

The repealed law, which was passed in October 2016 and included new rules created by the Federal Communications Commission, had yet to go into effect, so consumers probably won’t notice much difference. ISPs have been in the practice of monitoring network traffic – which means they can see which devices you use and which websites you visit – and sharing that information with third parties such as advertisers. An overview of how this might affect you follows.

Is This Repeal a Big Deal?

Many consumer advocates involved with internet privacy issues believe this is a big deal. The new FCC rules would have created much stronger privacy protection for internet users. The law, which was passed just before President Trump’s election, would have required ISPs to get a clear go-ahead from users to share personal data – including precise location information, financial data, health information, Social Security numbers, app usage history, as well as information on the users’ children. In addition, the new legislation would have allowed users to protect less sensitive personal data such as email addresses.

Why has the New Administration Repealed It?

The new FCC chief, Ajit Pai, has said that the repeal would help level the playing field, citing that the new rules would have benefited “one group of favored companies over another group of disfavored companies.” He vowed to protect consumer privacy through a “consistent and comprehensive framework.” This response did little to reassure advocates of internet privacy rights. A group known as Fight for the Future issued a statement decrying Congress’ move, saying “…they care more about the wishes of the corporations that fund their campaigns than the safety and security of their constituents.” This group has launched a billboard campaign to identify the members of Congress who backed the repeal.

What Can You Do to Safeguard Your Data Online?

Some privacy advocates are recommending that consumers use a virtual private network (VPN) to hide their browsing history and data from internet service providers. A VPN can also mask your location. If you wish to explore this option, be aware that VPNs are linked to service providers, which means it is incumbent on you to find a VPN whose privacy policies match yours. There is software available that also can hide your location and identity. These solutions have their issues, too. Some broadcasters – like Netflix – block VPN users from accessing their content. Software that hides your location and identity might slow your browsing down somewhat.

Internet privacy has been a hot issue for some time. These latest moves are likely to keep the topic in the headlines in the months ahead.