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The IRS has designed its new private debt collection program to minimize the risk of fraud, "because we know what it's like out there with regard to identity theft nowadays," said Brady Bennett, IRS director of collection.
Critics of the new program, which assigns unpaid accounts to private collection agencies, say that consumers can easily be taken advantage of by fraudulent collection.
The IRS plans to start assigning 12,500 accounts with unpaid tax debts to three private agencies starting next month. Approximately 40,000 accounts will be turned over to private agencies by the end of the year. These accounts are limited to taxpayers who owe less than $25,000 and don't dispute the debt.
Anyone contacted by a private collection agency has the right to insist that they only deal with the IRS on their account. Bennett said that taxpayers shouldn't worry about working with the private agencies. The IRS has performed background checks and has designed special training for collection agency employees, he said.
The agencies will not have access to the tax returns, only basic account information, including names, addresses and Social Security numbers.
The selected taxpayers will receive a letter from the IRS that gives the name of the company handling the debt. The letter will advise taxpayers of their rights. The collection agencies will then send letters telling the taxpayers that they will be contacted for payment of the debt.
The selected taxpayers will only be contacted by telephone or through the mail. The private collections agencies will try to locate taxpayers who have moved or changed phone numbers.
Taxpayers who are uncertain or want to verify communications are urged to call the IRS at 1-800-829-1040.
The IRS and the collection agencies will not communicate with taxpayers through e-mail, and will not ask for passwords or PIN numbers.
Bennett cautions taxpayers to make checks and money orders payable to the US Treasury, not the private company, and to send the money directly to the IRS. Collection agencies can arrange payment agreements that allow installments, if necessary. They will provide this information to the IRS.
Copywrited 2005 - 2006 & Developed by Tax Net Inc