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Private Debt Collectors: The Newest Way the IRS is Getting Your Money

In March of 2006, the citizens of the United States of America learned of some unsettling news. It was revealed that three private debt collectors would begin to help the IRS collect some of the tax debts that the citizens owed. There were thirty three applicants at the time that were vying for the positions that these three different firms won. It was estimated at the time that upwards of $7.7 billion dollars worth of unpaid taxes could be assigned to these private debt collectors. Many states throughout the country already are using private debt collectors to get the money owed to them, and some people saw it as only a matter of time before the Internal Revenue Service was able to find a way to use these collectors to help them achieve their goals as well.

In 2004, it was through an act of Congress that the IRS was given the privilege of being able to contract private collectors to help them get their money from unpaid sources. In the end, the IRS decided to try a test run of this process, and said in March that they could expand the project to include up to ten different private debt collectors. This process would be completed by 2008, sources estimate. Some lawmakers have taken the stance that this process would invariably impede on the rights of the taxpayers, specifically when it comes to the privacy of the taxpayers, but the law was passed and upheld.

There are some people that believe that there should be another avenue of action open to the taxpayers and the IRS besides this bold move, and argue that the private information of the individual should not be handed out by the government to people vying for the jobs to see that information. However, lobbyists for the act have argued that the companies that are contracted through the IRS will only receive basic information and their knowledge will be limited to that which enables them to get their job done. This does not placate the many people that still feel this is a slight on the American tax payer.

The way this process is set to work is that the private debt collectors will find people that owe the IRS money. If the individual cannot pay the debt in full, they do have some options available to them. There are some payment plans that can extend as far into the future as five years. In return for the money that the IRS receives, the law that was passed by Congress stipulates that these private debt collectors can earn as much as a quarter of the entirety of the tax funds that are collected. This could work out to be very profitable for the firms that are able to get these jobs from the IRS, but not so much for the individual citizen, whose tax information will now be available to common workers outside of the federal government.

Few are calmed by the information that debt collectors have thorough background checks before they have the clearance to do these types of jobs. Also, all of these private debt collectors must adhere to the laws that are established when it comes to the rights of the tax payers and the IRS. It has also been mandated that all of this work has to be done from within the United States of America. As punishment for illegally disclosing any type of personal information about tax payers that they are investigating, private debt collectors could be charged with felonies and face fines as well as possible jail time. They may also be punished, although not as severely, for merely looking up tax payers information that is not pertinent to their jobs.