Private debt collectors for taxes: An update on the upcoming IRS program

A few weeks ago, we concluded a two-part post on collection due process rights. At that time, we promised you an update on the upcoming IRS program to use private debt collectors to go after tax debt under certain circumstances.

In this post, we will deliver that update, in the form of a Q & A.

Whose idea was it to use private debt collectors for certain types of tax debt rather than having the IRS continue to do it?

That question can be answered in one word: Congress.

Numerous knowledgeable parties, including the National Taxpayer Advocate, had serious concerns about using private industry to collect tax debt. The concerns were understandable, given that on two previous occasions in the past, trying to use private collectors didn't bring in more revenue. Instead, it cost the government money.

But Congress insisted on giving it another try. Toward the end of last year, language requiring the IRS to use private debt collectors was inserted into a big transportation bill. The bill passed both houses of Congress and became law.

Under what circumstances will the IRS be required to turn over tax debt to private collectors?

The overall idea is to use private debt collectors to go after debt that the IRS is not already actively pursuing. More specifically, this involves cases where more than a one-third of the statue of limitations period has already passed, no IRS employee is assigned to the account, and it's been at least a year since the IRS tried to contact the taxpayer.

To be sure, there are exceptions to this. These include cases where the taxpayer is seeking a collection due process hearing or has applied for an offer in compromise or installment agreement. There is also an exception for innocent spouse cases.

When will the program be officially rolled out?

The IRS is still working on selecting debt collectors who will be authorized to participate in the program. The program is expected to become operational in the early months of 2017.

No Comments

Leave a comment
Comment Information
  • ABA | American Bar Association
  • AV Preeminent | Peer Rated for Highest level of Professional Excellence | 2018
  • Virginia State Bar | 1938
  • Super lawyer | 2018
  • DC Bar
  • American Bar Academy of Attorney - CPAs | The power of the dual view
Email Our Team

Contact Us to Get Started Today

Located in the Washington, D.C area, we serve clients in the District of Columbia, Maryland and Northern Virginia, as well as across the country and overseas. For a free initial consultation, call 202-381-1261 or complete our brief online form.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Six Convenient Office Locations in and around the DC Metropolitan Area

Washington, D.C.
1629 K Street NW, Suite 300
Washington, D.C. 20006

Phone: 202-618-1873
Fax: 888-235-8405
Map & Directions

Columbia Office
10440 Little Patuxent Parkway, Suite 300
Columbia, MD 21044

Phone: 410-497-5947
Fax: 888-235-8405
Map & Directions

Annapolis Office
888 Bestgate Road
Suite 400
Annapolis, MD 21401

Phone: 410-497-5947
Fax: 888-235-8405
Map & Directions

Fairfax Office
8280 Willow Oaks Corporate Drive
Suite 600
Fairfax, VA 22031

Phone: 703-621-7169
Fax: 888-235-8405
Map & Directions

Rockville Office
199 E. Montgomery Avenue
Suite 100
Rockville, MD 20850

Phone: 240-599-5009
Fax: 888-235-8405
Map & Directions

Baltimore Office
400 East Pratt Street
8th Floor
Baltimore, MD 21202

Phone: 443-743-3381
Fax: 888-235-8405
Map & Directions