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IRS Begins Using Collection Agencies

This month, the IRS will be turning over old tax debts to private collection agencies to pursue those who owe the government money. This is not new strategy as it was tried about twenty years ago during the Clinton administration with no success and again during the Bush administration with a similar outcome. But Congress being Congress decided to take a third bite at this rotten apple, passing a bill in 2015 allowing the IRS to pursue this method yet again. So what’s the big deal about private collection agencies attempting to collect IRS debts? Simply, it is an invitation for scammers to engage in fraud.

Nina Olson, the National Taxpayer Advocate, recently stated that past attempts to collect debts focused on taxpayers who fell into the “below poverty level” category.

“Nearly eight out of ten taxpayers pursued by the private collectors had no money”, Olson noted. Meaning that no amount of phone calls, letters or emails from these companies can produce money from people who don’t have it. In fact, Olson stated that the program was a total bust.