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Private debt collectors stand ready to collect past due tax debt

With the calendar turning to April, the federal income tax filing deadline is just over two weeks away. But for those businesses and individuals fretting over the inability to pay their tax bills, there may be a larger problem looming. Private debt collectors now stand ready to recover billions of dollars reportedly owed to the government.

The Fixing America’s Surface Transportation Act (FAST Act) requires the IRS to use private collectors to track down the following forms of tax debt: 

-          Debts that are not part of IRS’ current inventory due to lack of resources or the inability to find the taxpayer;

-           No IRS agent is currently assigned to the matter;

-           More than one-third of the applicable collection period on the debt has passed; and

-          More than 365 days have passed without contact with the taxpayer for purposes of collecting the debt.

Now let’s face it, taxpayers are likely to be skeptical of unscrupulous debt collectors posing as collection agents on behalf of the IRS; especially given the telephonic scams identified this spring. However, any private debt collector appointed by the IRS must adhere to the rules imposed by the Fair Debt Collection Practices Act. So if there are inappropriate statements or threats made in the name of collecting tax debt, an affected consumer may exercise their legal rights.

In the same vein, consumers contacted by these collectors may exercise the same rights available to them under the U.S. Tax Code. If you are contacted by a private debt collector regarding a past due tax debt, an experienced tax attorney can help.  

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Friday, November 18, 2016

Chaya Kundra will be a panelist at the New England IRS Representation Conference on Preparer Penalties.

Preparer Penalties: Everything You Need to Know! Over time the IRS has increased its focus from individual taxpayers to tax preparers. When the IRS identifies a pattern of false or fraudulent returns, it does not hesitate to impose penalties on the return preparers. This panel will walk you through the various penalties and what preparers need to know to protect themselves.

Moderator: Amanda Evans, Green & Sklarz LLC, New Haven, CT

Panelists: Chaya Kundra, Kundra & Associates, Rockville, MD, Barbara Kaplan, Greenburg Traurig, New York, NY

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