Private Debt Collectors and Your Tax Payments

If you currently owe taxes and are not making regular payments, you may need to think about how those debts will be collected over the coming months and years. According to a recent article in Forbes Magazine, you may be getting calls from debt collection agencies seeking to recover your tax debt. Did you think the Internal Revenue Service (IRS) was required to abide by different guidelines when it comes to consumer debt collection? Generally speaking, the IRS’s methods of collecting on tax debt do not necessarily look like the debt collection practices of many other creditors. Yet a new law may mean that the IRS turns to private debt collection companies to recover what it is owed.
New Law Could Change Methods of IRS Debt Collection
According to the article, President Obama’s decision to sign into law the Fixing America’s Surface Transportation Act could impact the ways in which the IRS collects debt. The new law does not deal specifically with tax debt. However, it “contains a pernicious scheme to raise revenue,” the article argues, and “requires the IRS to use private debt collectors.”
For quite some time, the IRS has been able to choose whether or not to use outside contractors (or private debt collectors) when it comes to collecting tax-related debt. However, the new law “makes it mandatory in some circumstances.” When must the IRS use the services of private debt collectors under the new law? The following represent some examples of situations in which consumers may receive calls about tax-related debt from private collection companies:
  • The statute of limitations is about to run out for collecting the debt; or
  • The IRS previously has not been able to collect the debt owed.
As the article emphasizes, “the bottom line is that you’ll see a lot more debt collectors going after citizens who owe taxes.” And while the IRS is not necessarily a popular agency with most Chicagoans, we do generally expect that the IRS will handle debt collection in a manner that does not appear to involve harassment or other illegal methods. For the IRS, “there are rules and procedures for interacting with taxpayers.” But handing over debt collection to private companies could mean that Chicago residents will experience more interactions with debt collectors that appear to violate the Fair Debt Collection Practices Act (FDCPA).
Private Debt Collection and the Fair Debt Collection Practices Act (FDCPA)
Consumer advocates are concerned that private debt collection companies hired to collect tax debts will not treat consumers fairly. While the FDCPA is aimed at protecting debtors from certain methods and means of collection, history has shown us that many private collection agencies violate the terms of the FDCPA.
In addition to unfair debt collection practices, business experts contend that private debt collection often does not result in a debt being paid. As a result, putting citizens’ tax debts in the hands of private collectors may simply mean that the IRS does not recoup what it is owed, and consumers may be treated unfairly in the process.
That more Americans may be getting collection calls about IRS debts does not mean that all of them are accurate, however. Chicagoans should keep in mind that “there have been many—and I mean many—instances of people claiming to be calling from the IRS, engaging in phone scams.” If you have questions about your rights as a consumer, you should speak with a dedicated Oak Park consumer protection lawyer as soon as possible. Contact the Emerson Law Firm today.
See Related Blog Posts:
Securing a VA Loan After Consumer Bankruptcy

Comments

Post a Comment

Popular posts from this blog

New Information on Debts That Bankruptcy Cannot Discharge

If you are thinking about filing for bankruptcy in the Oak Park area, it is important to know that certain kinds of debts cannot be discharged in a bankruptcy case. Under U.S. bankruptcy law, these are known as non-dischargeable debts, or exceptions to discharge. There are certain types of debts that have long been identified clearly as non-dischargeable debts, while there are misconceptions about other types of debts that may or may not be dischargeable. As an article in CNBC discusses, the U.S. Supreme Court recently issued a ruling in the case of Bartenwerfer v. Buckley , which clarifies that debts incurred due to another party’s fraud cannot be discharged in an individual’s bankruptcy case. Our Oak Park bankruptcy attorneys can explain the Court’s recent ruling and provide you with additional information on dischargeable and non-dischargeable debts. Supreme Court Says Debt Incurred Due to Another’s Fraud is Non-Dischargeable The recent Bartenwerfer case involved a debtor attempti
Read more

Learning About Different Types of Wills

Whether you are young or old, single or married, wealthy or with limited financial means, healthy or dealing with a medical condition, it is important to make a will. Many people have incorrectly heard that wills are only necessary for particular people, such as those with a substantial amount of assets or for older adults in poor health. Yet wills are critical for adults of all ages, and an experienced Oak Park estate planning lawyer can help you to make one. Before you begin working with a lawyer on a will, you might start conducting your own research into wills in Illinois and the requirements for a valid will. In so doing, you are likely to come across information about many different types of wills, and you are probably going to wonder whether you will need more than one kind of will. In short, there are different terms that can be used to describe the form or function of a will, as well as some distinct types of wills. Our Oak Park estate planning attorneys can explain in more
Read more

Younger Parents Need an Estate Plan

It is critical for younger parents to have an estate plan, even if they know they are healthy and do not anticipate that anything will happen in the near future. Much too often, younger parents assume that they can wait until they are older to consider estate planning or until there is a health-related reason to begin the estate planning process. Yet estate planning is critically important for parents who have minor children. While estate planning is important for adults of all ages, it can allow parents to make important decisions about who will care for their children in the event that they become unable to do so themselves. Our Oak Park estate planning lawyers can explain in more detail. Naming a Guardian for Your Minor Children in Your Will Most importantly for younger parents, making a will allows you to name a guardian who can care for your child in the event of your unexpected death. Nobody anticipates a deadly accident or a sudden situation in which there is a need for another
Read more