Law Offices of Kathleen D. Schneider
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Families, Since 1985
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Will a private collector contact you over past due tax debt?

With the federal income tax filing deadline coming this week, there are a number of people who lament the reality that they will have to owe Uncle Sam money. For those in this unenviable situation, they might not just have the IRS to deal with in the event they don't pay their tax bill.  Instead, they may have to answer to private collectors.

One of the little known aspects of the huge transportation bill passed by Congress in 2015, the Fixing America's Surface Transportation Act (FAST Act), will allow the IRS to employ private debt collectors to collect billions in back taxes owed to the federal government.

Whether this will this work out as well as legislators envision remains to be seen. Indeed, collection agencies recovered nearly $100 million for the federal government more than a decade ago. However, taxpayers may be much more wary of collection agencies given how prevalent imposters posing as collection agents have become. Also, some private collectors will be assigned to cases where no IRS employee is currently handling the matter, as well as those that have been "cold" (i.e. no collection activity) for at least one year.

If a private collection agency is assigned to collect an old tax debt you are associated with, you should know that the collectors will not have the authority to place tax liens on your property, and may not be allowed to enter agreements such as offers in compromise or installment payment plans.

Nevertheless, if you need legal advice in dealing with a private debt collector, an experienced tax attorney can help.

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