As we have noted in a number of our posts, having to owe Uncle Sam money during tax season can be quite troublesome; especially if you are already dealing with a glut of past due debt stemming from other facets of your life. Because of this, you are probably inundated with collection calls and letters. If you add past due taxes to your debt load, could you also be hearing from collection agents in that regard?
According to the latest transportation bill passed last year, it could happen. Section 32101 of the Fixing America’s Surface Transportation Act (FAST Act), will allow the IRS to use private collectors in a number of unique circumstances surrounding inactive tax receivables.
The definition of “inactive tax receivables” is rather broad, and encompasses tax debts that fit the following criteria:
- Have been removed from the IRS’ current inventory due to lack of resources or an inability to find the taxpayer
- No current IRS agent has been assigned to the matter and more than one-third of the applicable collection period has passed, and
- More than one year has passed without contact with the taxpayer for purposes of collecting the debt.
The private collectors will be subject to a number of limitations set forth by the Fair Debt Collections Practices Act, and will not have the authority take many of the actions available to the IRS to enforce tax laws, such as placing tax liens on property, brokering offers in compromise or establishing installment payment plans.
Nevertheless, taxpayers should be wary of imposters posing as collection agents for the IRS. If you have questions after being contacted by a private collector, an experienced tax attorney can help.