Thread: House of Reps kills IRS private Debt collectors

The House Ways and Means Committee Wednesday approved a bill that would strike language from the country’s tax code that authorizes the IRS to hire private debt collectors.

By a vote of 23-18, the committee Wednesday approved H.R. 3056, dubbed the “Tax Collection Responsibility Act of 2007,” that specifically removes the language in the Internal Revenue Code that gives the IRS permission to use private debt collection agencies for certain delinquent tax cases. The bill now goes to the full House for consideration.

Originally Posted by cap1sucks

The House Ways and Means Committee Wednesday approved a bill that would strike language from the country’s tax code that authorizes the IRS to hire private debt collectors.

By a vote of 23-18, the committee Wednesday approved H.R. 3056, dubbed the “Tax Collection Responsibility Act of 2007,” that specifically removes the language in the Internal Revenue Code that gives the IRS permission to use private debt collection agencies for certain delinquent tax cases. The bill now goes to the full House for consideration.

Interesting.......I know this was a hot topic, for "reducing" IRS expenses, and (supposedly) increasing collections of owed taxes.

However, I think the idea of "private debt collection" would open up such a legal issue that it would never be settled. As in, how does a "collection agency" prove they have the legal entitlement to collect what is a "voluntary contribution" (definition of levied tax!).

I also fail to see how a debt collection agency would have more effectiveness than tax liens, and armed special agents seizing all your property?

It is interesting to note that one of the very first collection letters sent by one of the IRS Collection Agencies is a violation of FDCPA.

How do I know?

I was the recipient of that letter.

Here are the facts:

I am an Enrolled Agent licensed by the IRS to represent taxpayers. One of my clients' accounts was turned over to the CA. This client has dropped off my radar screen a couple of years ago and I am unable to contact him.

The CA sent me a letter telling me in no uncertain language that I am now the responsible party for this client's tax debt.

Transferring this concept to a Criminal Court, it would be like imprisoning the defense attorney whenever the defendant is found guilty.

The CA's attorney is claiming this falls under the Bona Fide Error exception. I will give him a chance to prove that in Court.

Originally Posted by Flyingifr

It is interesting to note that one of the very first collection letters sent by one of the IRS Collection Agencies is a violation of FDCPA.

How do I know?

I was the recipient of that letter.

Here are the facts:

I am an Enrolled Agent licensed by the IRS to represent taxpayers. One of my clients' accounts was turned over to the CA. This client has dropped off my radar screen a couple of years ago and I am unable to contact him.

The CA sent me a letter telling me in no uncertain language that I am now the responsible party for this client's tax debt.

Transferring this concept to a Criminal Court, it would be like imprisoning the defense attorney whenever the defendant is found guilty.

The CA's attorney is claiming this falls under the Bona Fide Error exception. I will give him a chance to prove that in Court.

Is there a (partial) claim here that you are responsible for the fines and possible errors (if you completed the client's tax return)?

Originally Posted by Flyingifr

It is interesting to note that one of the very first collection letters sent by one of the IRS Collection Agencies is a violation of FDCPA.

How do I know?

I was the recipient of that letter.

Here are the facts:

I am an Enrolled Agent licensed by the IRS to represent taxpayers. One of my clients' accounts was turned over to the CA. This client has dropped off my radar screen a couple of years ago and I am unable to contact him.

The CA sent me a letter telling me in no uncertain language that I am now the responsible party for this client's tax debt.

Transferring this concept to a Criminal Court, it would be like imprisoning the defense attorney whenever the defendant is found guilty.

The CA's attorney is claiming this falls under the Bona Fide Error exception. I will give him a chance to prove that in Court.

First of all, what statute, rule or regulation makes you think that tax matters are consumer debt therefore falling under FDCPA?

What statute, rule or regulation says the CA acting on the behalf of the IRS has any authority to take you to court?

What statute, rule or regulation says that a tax preparer acting in his business capacity is a consumer who can avail himself of the protections of the FDCPA?

What statute, rule or regulation states that FDCPA applies to anyone other than a consumer?

Originally Posted by cap1sucks

First of all, what statute, rule or regulation makes you think that tax matters are consumer debt therefore falling under FDCPA?

What statute, rule or regulation says the CA acting on the behalf of the IRS has any authority to take you to court?

What statute, rule or regulation says that a tax preparer acting in his business capacity is a consumer who can avail himself of the protections of the FDCPA?

What statute, rule or regulation states that FDCPA applies to anyone other than a consumer?

The other basic question here is: "are owed taxes a debt, per se?"

As you used the term "consumer", this covers the implication of a commerce transaction, and an exchange of "equal value". Since the FDCPA in practice covers what are commercial transactions, and I do not believe payment of income taxes falls under this category.

flyingifr's receipt of "notice" is (in my understanding) a practice to ensure awareness to the preparer, and their potential involvement.

I also do not see how the FDCPA applies to taxes, as the tax law provides its own procedures, protectionary laws and procedures. For instance, a "CA" does not have to "legally" consider an "Offer In Comprimise", which the IRS does have to consider (for owed and unpaid taxes).

The intent of the bill to allow past due tax collection to be performed by commercial collection agencies was one seeking to reduce the cost of the IRS, and expedite the backlog of uncollected taxes. I doubt this act will happen, a main reason being that these Tax CAs would have to conduct business in accordance with IRS statutes. Not an easy transition.

I have dealt with the IRS, and their collection abilities are much more powerful than any CA!

I am not the preparer of the returns and had no hand in them. To this day I have never even seen them.

Originally Posted by Flyingifr

I am not the preparer of the returns and had no hand in them. To this day I have never even seen them.

Did you ever "represent" this client? I'm a bit confused on how you would be provided notice, if you were not part of the preparation, or representation...

Did this person "list" you as a preparer?

As I said - I represent this client. No chance of IRS thinking I am the preparer (besides, the preparer is never responsible for the taxpayer's tax debt - only Preparer penalties for fraudulent representation).

The CA's letter plainly states that I am now responsible (in their eyes) for the client's tax debt. It is addressed to me personally and not as a Representative and clearly states "You are responsible for payment of this debt".

Originally Posted by Flyingifr

As I said - I represent this client. No chance of IRS thinking I am the preparer (besides, the preparer is never responsible for the taxpayer's tax debt - only Preparer penalties for fraudulent representation).

The CA's letter plainly states that I am now responsible (in their eyes) for the client's tax debt. It is addressed to me personally and not as a Representative and clearly states "You are responsible for payment of this debt".

I'm not sure I understand this situation....was this an indivdual tax "owed", or a corporate tax liability? I'm puzzled by a "CA" contacting you, who are they claiming is the "OC"?