Starting in Spring of 2017, US taxpayers will begin receiving letters from the Internal Revenue Service notifying them that their “outstanding inactive tax” debt has been reassigned to one of the four (4) following Private Collection Agencies (PCA):
200 CrossKeys Office Park
Fairport, NY 14450.
325 Daniel Zenker Drive
Horseheads, NY 14845
333 N. Canyons Parkway,
Livermore, CA 94551
- CBE Group
1309 Technology Parkway
Cedar Falls, IA 50613
If you read nothing else, read this: if your account falls into this program, you will receive a letter from the IRS, as well as a letter from the PCA, notifying you that your case has been transferred — If you receive one of these letters, contact a tax attorney immediately.
You can “opt out” of the assignment to the private collector by serving a written objection on the private collector in a timely fashion. The benefits of having your matter reassigned to be handled by the IRS are profound.
The only types of accounts that are being transferred to the PCAs are “inactive” which means that these cases are low priority for the IRS, and have not been touched by anyone at the IRS in more than one year.
The PCAs, by contrast, will only be receiving inactive cases, and can only hope to collect by aggressive and annoying tactics, and/or lawsuits. The PCAs may also be less willing to waive or abate penalties or interest, as the IRS has been known to do for a variety of reasons.
The only types of cases that will be sent to these private collectors are matters that will be “unappealable”. However, it is likely that many of these cases are matters where the taxpayer and the IRS never corresponded at all, due to the IRS’s problems with locating the taxpayer being one of the criteria for transfer to a PCA. In cases where the taxpayer never received notice and opportunity to be heard, the taxpayer may actually be afforded another chance to contest the assessment of tax.
It is easy to see that taxpayers that have their cases transferred to a PCA for collection will likely be taxpayers who will have issues for multiple years, because the lack of contact requirement may mean that the taxpayer has moved and/or has stopped filing tax returns. By opting out of the PCA program, these taxpayers can address and resolve all years in one go. Addressing tax problems that span more than one year may increase the likelihood of a favorable Offer-in-Compromise or an Uncollectible determination that results in the taxpayer paying pennies on the dollar.
Congress has tried many times to privatize portions of the IRS debt collection process, and twice in recent memory. In 1996 and again in 2006, the IRS began to outsource some of its collection actions to PCAs. Both attempts were determined to be a failure; neither attempt showed that the PCAs ultimately collected more efficiently than the IRS, while the 1996 attempt in particular was ended amongst allegations of violations of the Fair Debt Collection Practices Act. This is the same act that is going to be used to protect the taxpayer today from the PCAs.
Note that only one of the four PCAs listed above is allowed to collect on a debt for the IRS. These agencies, nor the IRS, will NEVER request that you make payment via prepaid credit or debit card.
CALL US TODAY TO RESOLVE YOUR TAX ISSUE!
Calling a tax attorney immediately upon receiving a notice from the IRS is always a good idea, but with the entrance of PCA into the realm of Federal debt collection, this advice has never been more true.
The attorneys at Cardin and Company, APC can help keep your tax problem out of the hands of the PCAs, and can stop the phone calls from these collectors. We can also help you resolve all of your tax problems with the IRS.
No matter where you are in the collection process, and no matter what your tax need, the tax attorneys, CPA and accountants at Cardin and Company are here to help. Call us to schedule a consultation at (760) 434-1040, or visit our website to learn about all of our services.