The IRS is delegating tax collection duties
When people are already under the pressure of high debt, it may be easier for them to fall victim to schemers who use even more pressure to get them to turn over the money. If you have received such calls, you know how intimidating they can be, perhaps threatening you with terrifying consequences.
When your debt includes tax delinquencies, you may wonder how far the government will go in collecting that debt. Obviously, the laws are more liberal when it comes to Uncle Sam, but how can you know when you are talking to a legitimate debt collector or a fraud trying to rip you off?
Tax collectors stepping over the line
The face of the tax collector is changing, and the tactics may be changing, too. Recently, the Internal Revenue Service contracted four collection agencies to help them track down and reclaim delinquent taxes. This is a move the IRS has tried in the past without success, but the agency is hoping to increase the amount of funds it can recover with help from these private companies. If you owe the IRS money, you can expect the debt collection process to follow these steps:
- The IRS will send you a letter in the mail notifying you of exactly how much you owe and which of the four collection companies will be contacting you. The only debt collectors the IRS has approved to collect back taxes are:
- After you receive the letter, the company assigned to you will call you.
- The collector who calls you will direct you to send a check to the IRS offices made payable only to the U.S. Treasury. You may also pay online through the IRS website.
- If a caller asks you to write the check to any entity other than the U.S. Treasury or to send payment in any other form (such as gift cards or pre-paid debit cards), it is likely a scam.
- If a caller demands more money than your IRS letter indicates you owe, it is likely a scam.
What may confuse you and others in Nevada is that some of the collectors working for these private companies are making reckless and dangerous suggestions to those who are behind on their taxes. For example, some taxpayers report that the callers representing the IRS have urged them to mortgage their homes, drain their 401(k)s or use their credit cards to pay off the debt. These strategies place you at risk of serious financial consequences.
To avoid such consequences, financial advisors recommend understanding your options. While the IRS is known for its tough tactics in collecting its debts, with the right assistance, you may be able to negotiate a payment plan or even a debt reduction. To learn the full spectrum of alternatives, you have the right to contact an attorney who has experience dealing with the IRS.