What Bills Consumers Pay First
Fans of the “insane” legendary magazine harpooning everyone and everything in America will certainly recognize the quote in the title. While the publication’s mascot may carry a devil-may-care attitude, the concept of the Internal Revenue Service outsourcing collection efforts to private debt collection agencies may send chills up the spine of anyone who has encountered difficulty with the organization or is concerned about the abuse of taxpayers’ money — recall the story about the Pentagon buying $640 toilet seats.
On September 26, 2016, the IRS announced its plan to begin “private collection of certain overdue federal tax debts as early as spring of 2017 and has selected four contractors to implement the new program.”
The debt collection agencies will focus on debt that the IRS is no longer actively seeking. “Several factors contribute to the IRS assigning these accounts to private collection agencies, including older, overdue tax accounts or lack of resources preventing the IRS from working the cases.”
The announcement included the following assurance:
- The IRS will give taxpayers written notice that the accounts are being transferred to private debt collection agencies; a separate letter from the agency confirming the transfer will follow.
- The IRS will strive to help taxpayers avoid confusion and understand their rights and tax responsibilities, “particularly in light of continual phone scams where callers impersonate IRS agents and request immediate payment.”
- Agencies will identify themselves as contractors collecting taxes on behalf of the IRS.
- Agencies and their employees must follow provisions of the Fair Debt Collection Practices Act (FDCPA) and should be courteous and respect taxpayer rights.
- Taxpayers will be informed about electronic payment options for taxpayers on the IRS site. Check payments will be payable to the U.S. Treasury and sent directly to IRS, not the private collection agency.
- The IRS will keep taxpayers informed about scams and provide tips for protecting themselves.
Taxpayers have the option of not working with the assigned agency if they submit a request in writing to that agency. The announcement did not mention if the IRS would resume collection efforts or if taxpayers had the option of choosing another agency.
Takeaways about the Use of Private Debt Collection Agencies
Optio is committed to raising the bar of debt collections to a new height of professionalism. Consequently, it believes the outsourcing plan will be successful if the contractors are fully compliant with all relevant legislation; maintain full transparency with the IRS and the taxpayers; remain accountable for their actions; and utilize the latest digital security systems to protect consumer data.
Directors of collections searching for a new or replacement agency would be well served by Optio’s success in industries including financial services, education, healthcare, retail, utilities, telecommunications and auto. Contact us today for a free consultation to learn how our clients receive favorable returns on investment without jeopardizing their reputations or consumers’ loyalty.
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