Tips for Taxpayers
In Case You Are One of the 2.6 Million People Whose Personal
Tax Information The IRS Is Giving To a Private Collector Agency

That’s right. As shocking as it sounds, the Internal Revenue Service (IRS) has decided to turn over to private sector tax collectors the personal and sensitive information, including the Social Security numbers of as many as 2.6 million taxpayers.

The idea is to have private collection agencies pursue back taxes on a commission basis; that is, they’ll get paid based on how much of your money they collect—up to 24 percent of it. The IRS is moving ahead with this plan, despite considerable and growing opposition to it from members of Congress, and longstanding opposition by NTEU.

Later this month, the first 40,000 or so files are being turned over to the debt collectors. If your tax information is among those files, you will receive a letter from the IRS notifying you that a private collection agency is pursuing you for back taxes.

But there’s something you can do about it. In that letter, the IRS also will tell you that you can refuse to let the private collector handle your case, and that you want the IRS to continue handling it. But you’ll have to write a letter to the debt collector saying that, and send a copy to the IRS. Here’s a sample letter to help you do that.

You can, of course, let the debt collector proceed to contact you. If you choose to do that, remember that you have rights under the law and that the debt collection companies are required to adhere to the Fair Debt Collection Practices Act. Here are some tips you should know that will help protect you when you are dealing with a debt collector.

What federal law says about debt collectors and their collection practices:

• A debt collector can’t contact you at inconvenient times—such as before 8 a.m. or after 9 p.m.—or at your work if the collector knows your employer disapproves of such contacts. If they call you there, make sure to tell them your employer doesn’t permit it.

• You can stop a debt collector from contacting you by writing the collector a letter telling them to stop. Note: that does not make the debt go away, if you owe it.

• If you have an attorney, tell that to the collector, who must then deal with your attorney rather than you.

• The collector can contact third parties, but only to find out where you live, your phone number and where you work. In most cases, they can’t tell anyone but you or your attorney that you owe money.

• If you already paid the balance due on your account and believe you received the letter from the IRS stating that your overdue tax account had been assigned to a collection agency by mistake, call the IRS number shown on the letter to contact the IRS customer service unit that works with private collection agency issues.

• A collector can’t harass you—like threatening violence, using obscene language or repeatedly using the phone to annoy you. Keep a written record of the dates and times of their calls.

• A private collection agency cannot take any kind of enforcement action against you to settle your overdue tax account. The IRS can file a Federal Tax Lien or issue a levy, but the debt collector cannot.

• A collector can’t make false statements to collect a debt—like saying you’ll be arrested if you don’t pay. They can’t say they’ll sue if a suit isn’t legally possible or if they don’t actually intend to file suit against you.

• They can’t send you anything that looks like an official court or government document when it isn’t actually an official document. Save everything you get from a debt collector.

So, if any of these violations happen to you, here’s what to do:

Contact your state attorney general’s office because many states have their own laws governing debt collectors. The attorney general’s office in your state can help you determine specific rights you may have. Their number is under state government in your phone book or visit www.naag.org

Contact the Federal Trade Commission (FTC). The law that most directly applies is the federal Fair Debt Collection Practices Act and the FTC is responsible for monitoring violations of that law. For information, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357).

Contact the National Taxpayer Advocate, an independent office within the IRS. The Taxpayer Advocate’s role is to ensure that taxpayers are treated properly and fairly when they deal with the IRS. Contact 1-877-ASK-TAS1 (1-877-275-8271) or visit www.irs.gov/advocate

Contact Congress Today!

This can still be stopped. Contact your Senator. If the Senate acts to restrict funds to the IRS for this program, the IRS will be unable to move forward. You can protect your personal information from being turned over to companies who were never intended to have access to it.