So, now we've got a situation in which the IRS may be allowed to contract with private debt collection firms. No, really. The same people who call you at all hours of the day or night to get your money for Citibank et. al., will be calling you to collect Uncle Sam's dime. Indeed, the IRS hopes to be able to outsource collection of up to 2.6Million tax debts to private firms.
Thing is, they'll get to keep up to 25% of what they collect.
Great. What this means is that, because of the huge amount of people who owe money to the IRS, these firms will be inundated with collection contracts. And because of the grand rate they'll be offered by the Feds, they'll be pulling out all the stops to get you, unwary citizen, to pay up.
The IRS will retain its audit authority, and the one textual bright spot in this is that these firms will only get your address, telephone number, and the amount of your debt (the same thing they'd get from a credit card company). They apparently will not have access to your tax documents. Whew!
I am here, though, to tell you all what should be done about all of this.
Let's look first at the past. If the IRS, say 5 years ago, decided that you owed them $10,000 in unpaid taxes, they could, quite literally, come after you. And they did. Because they are an arm of the Federal Government, they were immune to suits for harassment, or other forms of intimidation. In fact, to hear some people tell it, such tactics were encouraged by them.
And now today. If the IRS is allowed to contract collections out, then some power should return to the hands of the people. See, there's this obscure little piece of legislation called the "Federal Fair Debt Collection Practices Act." It requires collection companies to play by some pretty strict rules when attempting to collect debts. Presumably, firms attempting to collect tax debts wouldn't get a free pass, but they will. Many (if not most) states have similar legislation on the state rolls as well. None of the acts, however, apply to "government debts." But they should. WRITE YOUR CONGRESSPERSON TODAY!!!!!
So, while government outsourcing may be seen by some as horrible, in this case it could end up a boon. If you are now, or at any time in the future, being harassed by a company attempting to collect a debt (any debt), contact a lawyer. If we don't show the collection agencies that we mean to hold them accountable, they'll continue to push the envelope. When you contact your Congressperson, be sure and tell them that we see what they're doing, and we don't like it.
Don't lie down.
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