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Private Debt Collectors

Private debt collectors begin to send letters to taxpayers

Watch out!  This month the Internal Revenue Service (“IRS”) and private debt collectors will begin to send letters to taxpayer’s who have old IRS tax debts to tell them that their overdue federal tax debts have been assigned to private debt collectors (“PDC’s”).

Read the full article at https://www.irs.gov/businesses/small-businesses-self-employed/private-debt-collection

What do you need to know?

First of all, you will receive a letter from the IRS which contains the name of the PDC and a unique Taxpayer Authentication Number.  Keep this letter!

You will also receive a letter from the PDC.  If you get contacted by someone who is unable to tell you your Taxpayer Authentication Number, assume it is a scam and do not make any payment or give the caller any information.

Remember, neither the IRS nor the PDC will ask you to pay your old taxes using any form of a pre-paid card or store or online gift card.

In order to make as much money as possible, the PDC is going to try to collect as much of the old taxes as possible from you.  If you are unable to fully pay the taxes owed when the PDC contacts you, the PDC can enter into an installment agreement providing for payments within 5 years.

Keep in mind, the IRS has more flexibility and can consider other collection alternatives such as:

  • full payment within 6 years
  • a partial pay installment agreement
  • classifying  your tax debt as “Currently Not Collectible” (so you don’t have to pay at all while you are in this status), or
  • an Offer in Compromise.

When dealing with the IRS, if the IRS rejects an installment agreement request, a taxpayer has the right to appeal that decision to the IRS Office of Appeals, an IRS function separate from IRS Collections.  As long as you are dealing with a PDC, you do not have the right to appeal if you cannot agree on an appropriate payment amount.

However, you do not have to deal with Private Debt Collectors.

You may send the PDC a letter requesting that your tax account be returned to the IRS for resolution.  We believe that dealing with the IRS will be a far more flexible way of  dealing with the tax matter.

H.T. Astrov helps clients in the San Francisco East Bay and  nationally find peace of mind and practical solutions to their IRS tax problems.  H.T., an attorney and non-practicing CPA, has more than two decades of experience providing counsel on a wide range of U.S. and non-U.S. tax matters.  His background includes serving as an Attorney-Adviser for the IRS Office of Chief Counsel in Washington, D.C. and as Senior Tax Counsel for Chevron in San Ramon, California.  H.T. received his B.S.B.A. from Georgetown University, his J.D. from The Ohio State University Moritz College of Law, and his LL.M. (Taxation) from Georgetown University Law Center.

If you are facing a tax issue with the IRS or PDC contact us today by calling (925) 828-2415 or (614) 699-6025 or email us.