Advice, Preparation . . . Results™

Think your unpaid income taxes are forgotten? Think again! (Part 2 of 2)

You now know what to watch for to avoid being defrauded if you’re subject to an IRS collections action conducted by a private company. This next section involves knowing just who is likely to find themselves dealing with collection agencies.

Below lists three basic criteria the IRS uses to decide which taxpayers to transfer, with some exceptions:

  • A 10-year statute of limitations on collections exists, but more than one third of the time must expire before the receivable passes to a private agency;
  • No IRS employee is currently assigned to collect the debt; and,
  • No contact with the taxpayer occurred in at least a year, either initiated by the IRS, or the taxpayer requesting a payment alternative or some form of relief.

Taxpayers who will not transfer to a private agency include minors, victims of identity theft, or anyone in a federally declared disaster area or combat zone. Additionally, it appears taxpayers who’ve experienced economic hardship, and negotiated this status with the IRS, are excluded from the private collection program.

When the IRS is unable to locate taxpayers, they’re removed from active collection. The private collection agencies will then attempt to locate them to pursue the accounts.

But debt collectors lack the enforcement authority of the IRS. They can’t file liens or issue levies, nor can they assist taxpayers with removing liens already placed by the IRS. Taxpayers still maintain the option of contacting the IRS about lien removal or collection alternatives instead of dealing with a private agency.

With a mission of ensuring you’re treated fairly, the private debt collection service is overseen by the Taxpayer Advocate Service. However, if your problem is particularly complicated, seek out the services of a tax attorney or accountant to represent you before the IRS. Of course, these services aren’t free.

The qualified tax accountants at Patrick & Robinson CPAs offer an initial free 30-minute consultation; this time won’t be enough to resolve your problem, but perhaps we can point you in the right direction.

Contact us at your convenience: or 904-396-5400.

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