IRS Now Required to Use Collection Agencies

02H30392

In a 1,300 page Transportation Bill signed into law in December, 2015, there are eight pages that require the IRS to assign unpaid tax bills to outside collection agencies. This means that third party companies will now be calling taxpayers as representatives of the IRS to collect unpaid taxes.
What you need to know

What has changed. Prior to this bill, the IRS had the option, but not the requirement, to use other companies to try to collect past due tax bills. The IRS is now required to assign some of these unpaid taxes to outside companies for collection whether it is cost effective or not.
Non-IRS companies may call you. If the IRS thinks you owe money and the statute of limitations for collection is approaching, you may have your tax bill assigned to a debt collector. This means you could receive phone calls and communication from a third party company that has your tax information.
Your fraud alert senses should go up. This debt collector requirement may open the door to more tax fraud as thieves know they can falsely represent themselves as an agent of the IRS. Please be vigilant to this risk.
The $900 million problem? The IRS acknowledges over $900 million in premium health care credits during 2014 will need to be repaid by taxpayers. There is the possibility of having some of this collection activity assigned to third party companies due to lack of IRS resources.
There are rules. While the IRS may assign any unpaid debt to collection agencies, the “required transfer” of unpaid debts has specific rules. You may NOT be asked to pay tax bills from a third party debt collector if:

Check You are under age 18
Check The taxpayer is deceased
Check You are a victim of identity theft
Check You have an innocent spouse case
Check Your tax case is active within the IRS
Remember to be cautious if you are contacted by someone representing themselves as an agent of the IRS. When in doubt ask for help before providing any information.