Are
aliens to blame for law
outsourcing IRS tax collections?
SALT LAKE
CITY — I'm beginning to
wonder if some extraterrestrial
has removed the common sense of
the those who represent us in
Washington.
Take, for
example, the latest nonsensical
measure to come out of Congress.
The IRS, under a project
authorized through the 2004
American Jobs Creation Act to
collect delinquent tax bills,
has been forced to hire private
collection agencies to do a job
the agency could do for much
less. Isn't outsourcing supposed
to save money? I guess not
because our government is
willing to pay private debt
collectors between 21 cents to
24 cents per dollar collected.
That's compared with about the 3
cents it would cost to have IRS
employees do the job, points out
Colleen M. Kelley, president of
the National Treasury Employees
Union.
"Clearly
if you had new money to put on
the table it could probably be
done more effectively," said
Linda Stiff, the IRS deputy
commissioner of the small
business/self-employed division.
The IRS
already has begun assigning
delinquent federal tax accounts
to private collection companies.
IRS officials say these accounts
aren't being pursued because
there's no staff to handle the
cases. Over the course of 10
years, the IRS expects the
private firms to help it collect
an additional $1.4 billion in
outstanding taxes.
The three
companies initially
participating in this first
phase of the collection program
are the CBE Group Inc. of
Waterloo, Iowa, Linebarger
Goggan Blair & Sampson LLP,
based in Austin, Texas, and
Pioneer Credit Recovery Inc. of
Arcade, New York. In the second
phase of the project, scheduled
for 2008, the IRS intends to
hire as many as 10 firms.
If know
you owe back taxes, you should
take care not to be fooled by
fake collectors. Here's some of
what the firms are permitted to
do and not to do:
The private agencies can't
claim they have power to take
enforcement actions such as
filing liens or making levies or
property seizures.
Collection company employees
are not permitted to call or
write any third party, such as
your employer, bank or
neighbors, to ask about your
financial condition.
Employees
are allowed to speak to your
spouse or leave a message on an
answering machine for purposes
of trying to contact you by
phone. However, once the
collection company knows how to
reach you directly, it can't
continue contacting third
parties.
Most importantly, the firms
still have to comply with the
Fair Debt Collection Practices
Act, which spells out what debt
collectors can and can't do.
Generally, no contacts can be
made earlier than 8 a.m. or
later than 9 p.m. your local
time.
If you're
going to be contacted by one of
these private collection firms,
you will get written notice from
the IRS first. The name of the
company will be included in the
letter. The mailing will explain
that a taxpayer may request in
writing to work with the IRS
instead of with the private
company. (For a sample of such a
letter go to
www.irswatch.org.) A second
letter will come from the
collection firm.
When
paying a collection agency, the
check should be made out to the
U.S. Treasury. Do not make it
out to an individual or firm.
Robert Paisola is an international
motivational speaker, trainer and author. He is
an expert in the field of Personal Real Estate
Investor Training. He is a professional speaker
who has been featured on CNN, CNNFN, and the
Wall Street Journal. He can answer your
questions on the "Basics of the Real Estate
Investing Business" to detailed issues regarding
your specific transactions. Life Experience
Robert Paisola is a Professional International
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Investing, Tax Lien Investing, Rental Property
Management, Real Estate Coach and Mentor
Training and Business Management. He has served
companies throughout the world.
Are
aliens to blame for law
outsourcing IRS tax collections?
