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Tax Debt

Private Tax Debt Collection Cause for Concern

One of the biggest reasons taxpayers seek Boca Raton tax debt relief is because of aggressive debt collection efforts. The Internal Revenue Service has tremendous power to levy your bank accounts, garnish your wages and file federal tax liens to try to recover back taxes. With your property at risk, getting help to resolve your tax debts is the best option.

Unfortunately, things could get worse for debtors who owe back taxes. Proposals to use private debt collection agencies to recover tax debt have consumer advocates, taxpayers and some lawmakers concerned about the potential for harassment and inappropriate collection techniques.

Why Private Tax Debt Collection Could Be Bad For Consumers

The Highway Trust Fund, which is used to rebuild infrastructure, is at risk of funding shortages and federal lawmakers are hoping t to shore up the money in the fund by using private debt collectors to collect back taxes owed. This would not be the first time this technique was used to try to improve collection efforts.

Close to 20 years ago, a similar initiative was attempted.  However, the plan to use private collectors lasted under a year and had to be ended as consumers complained about harassment and unfair practices.

When the American Jobs Creation Act passed under George W. Bush in 2006, another attempt was made to use private tax debt collectors. Again, complaints quickly arose — including one egregious case reported on by Forbes in which a tax debt collector made more than 150 calls to a taxpayer’s elderly parents, despite knowing that the taxpayer no longer lived at the address where his parents resided.  Three of the companies that had originally been hired as private collectors under the American Job Creation Act ended up being dropped from their government contract because thousands of dollars in penalties had to be paid out when taxpayer rights were violated. This program, too, was ultimately terminated.

Despite the history of problems with aggressive collection efforts, lawmakers are now hoping to try again with private collections. However, support for the inclusion of a private debt collection provision in the Highway Trust Fund Bill is not universal. Some Democratic members of the Ways and Means Committee and the Budget Committee have released a statement warning: “It is misguided and harmful to taxpayers to use private debt collectors to collect outstanding tax liabilities.”  Other Democratic leaders, however, including Charles E. Schumer, have led initiatives in the past aimed at switching responsibility over to private debt collectors.

Turning over debt collection to private companies has many potential pitfalls, despite bipartisan support. Aside from the risks associated with harassment and aggressive collection practices, there is also concern about handing private taxpayer info over to potentially unscrupulous companies. More than 200,000 complaints were filed with the Federal Trade Commission last year as a result of dishonest and unlawful practices by private debt collection agencies, and these agencies could soon be given access to detailed info necessary to collect back taxes.

Those who owe and do not want to find themselves subject to debt collection efforts by aggressive private companies should take action quickly to explore their options for tax debt relief.  East Coast Tax Consulting Group provides comprehensive tax resolution assistance services to taxpayers in Palm Beach, Broward and Miami-Dade Counties.  Call today to learn more about how we can help.


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You deserve the best in IRS tax representation, tax preparation, and tax planning services. At East Coast Tax Consulting Group, you’ll work with a licensed CPA who will handle your case from beginning to end. We invite you to contact our team to schedule a free, confidential consultation.