Four debt collection agencies have contracted with the IRS to collect unpaid taxes. Experiments by the IRS with private debt collectors have been tried before. I am one of the many people convinced that outsourcing tax collection work to private contractors is a bad idea.
National Taxpayer Advocate, Nina Olson warned that it didn’t work in 1996-1997 or in 2006-2009 and isn’t going to work again:
“The program undermined effective tax administration, jeopardized taxpayer rights protections,
and did not accomplish its intended objective of raising revenue…the program ended up losing money.”
The Fair Debt Collection Practices Act (FDCPA) prohibits abusive and deceptive behavior when collecting debts.
It applies to debt collectors attempting to collect unpaid taxes.
Any contractor that fails to follow the FDCPA can, and should, be sued.
Here is an abbreviated list of behavior prohibited by the FDCPA:
- Failure to cease communication upon request.
- Contacting consumers at their place of employment after being advised that this is unacceptable.
- Contacting a consumer known to be represented by an attorney.
If you are contacted by a private tax collector, you should send them a letter to notify them that you will not accept further communications from them.
– Mark S Gleason CPA