October 4, 2016 by Jay Freeborne

In the spring of 2017, the IRS will be contracting with four private agencies to attempt to collect IRS tax debt outside of what the agency is actively chasing. Sounds daunting. But a closer look shows that these folks might be on a bit of a "lost mission." As per the IRS, these outfits will be collecting older tax debts exclusively - 2012 and older years (by our estimate). These accounts will also have to have been dormant for at least one year, i.e., not pursued by an IRS employee in that time frame. Debts that are already in payment plan, Offer in Compromise (OIC) status or "Currently Not Collectible (CNC)" won't be handled by these groups.

The agencies won't be able to levy or enforce the collection debts and probably will just focus on setting up payment agreements for folks. People with tax debts that insist on pursuing OIC or CNC will probably have to request that their case go back to the IRS. Well...shouldn't that be your default response if faced by these collectors?! We think so. It also seems to be implied that payment agreements also might need to go thru IRS as well? This latter aspect - payment plans - wasn't clear, but it would seem to make sense for the private agencies to negotiate installment agreements in some way.

Previous attempts to outsource IRS collections to private agencies has failed. But the GOP led Ways and Means Committee thought to give it another try.

Who should be concerned about Private Tax Collectors?

If You Live in a State were IRS enforcement has dropped due to budget cuts.

With the IRS's ten year slide in enforcement due to budget cuts, some particular areas of the country have seen less IRS collections and a backlog of large debts. If you live in one of these areas - Texas is definitely one of them - the private tax collectors might be bringing your back tax debt in the light. Time to take action before they come calling.

Big debtors in Any State who cases are dormant NOT in OIC, CNC or payment plan status.

Pretty simply if you live anywhere in the US and owe a lot of back taxes to the IRS, you should be on your toes.

First consideration for an older back tax debt is it's Collection Statute Expiration Date (CSED). If you owe back taxes and want to see where you stand before the private agencies contact you, call us at 1-888-282-4697. We'll research your IRS record without stirring the bee's nest, find out your CSEDS and tell you what your options are. You can also EMAIL us a description of your tax issue HERE and we'll contact you. Staff of Washington Tax Services

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