US tax department IRS to use private debt collectors

05 April 2017

The US Internal Revenue Service yesterday said it plans to resume the use of private debt collectors, in backdrop of rising telephone scams, in which fraudsters poaing as tax men call innocent taxpayers to pay up or face jail term.

The IRS stopped the practice of using private debt collectors in 2009 after the agency determined the work could be better handled by employees. However, under a law passed in 2015, the IRS will be required to restart the programme.

According to the agency it will soon start turning over the accounts of 100 taxpayers a week to four private debt collectors,  expanding to 1,000 accounts a week for each firm by the end of summer.

The firms could keep up to 25 per cent of the proceeds.

The IRS said it would send letter to taxpayers alerting them that their accounts were being turned over to private debt collectors to counter fraud. The private collectors would then send letters to the taxpayers before calling them.

''The IRS remains extremely concerned about the many con artists out there who masquerade as IRS employees or contractors,'' said Mary Beth Murphy, who heads the small-business and self-employed division at the IRS.

Meanwhile, the IRS said in its latest data book that fiscal 2016 was a ''turnaround'' year for it, notably in its improved telephone customer service, and close to 300 million visits to the Where's My Refund website.

The data book carries a letter from IRS commissioner John Koskinen in which he points out that ''IRS resources have shrunk, demand for help from the IRS has surged in key areas.

''The data book and its consistency year-to-year help illustrate trends over time, ranging from the increasing size of the taxpayer population to the decreasing size of the IRS workforce,'' Koskinen said.

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