by liz skinner
\njune 27, 2005<\/p>\n
washington – the three private collection agencies that will soon help uncle sam capture what is due from individual taxpayers are expected to take on about 40,000 cases during the first year, according to the internal revenue service. <\/p>\n
there is about $260 billion in accounts receivable right now, and about $80 billion is considered potentially collectible, the irs’ brady bennett said recently during an online panel discussion on “tax talk today,” which the irs co-sponsored. he is the collection director for the agency’s small-business\/ self-employed division.<\/p>\n
– advertisement -the american jobs creation act, signed by president bush in october, allows private collectors to help take in federal tax debts, and the irs plans to start using them in january. <\/p>\n
the three firms will be chosen next month. the cases sent to private collectors will be those in which individuals owe between $100 and $25,000 and in which the assessments aren’t disputed, irs officials said.<\/p>\n
mr. bennett said that the goal is to cut the amount of uncollected taxes for which irs employees lack the time to go after right now. <\/p>\n
the private collection agencies won’t be allowed to threaten individuals that, if they don’t pay up, they will be visited by revenue officers. and they won’t have the enforcement tools that irs officials do, such as assessing liens or seizing assets. <\/p>\n
the irs will send individuals a letter if their case is being referred to a private collection agency. taxpayers will have the right to appeal and will have the same protections they do when dealing with the irs, mr. bennett said. <\/p>\n
up to a dozen private firms will collect for the government when the program is fully implemented in 2008. irs officials note that taxpayers still send the government their checks.<\/p>\n
in another tax change triggered by the federal jobs creation bill, the irs now accepts “partial payment installment agreements” for federal tax liabilities. <\/p>\n
previously, anyone who entered into an installment agreement with the irs had to show that they would pay their full debt. under the new rules, taxpayers can promise to make certain regular payments based on their ability to pay, even if those payments won’t entirely pay the debt.<\/p>\n
the financial situation of these taxpayers would be reviewed every two years to see if circumstances had changed to allow them to pay more, mr. bennett said.<\/p>\n
robert panoff, a miami tax attorney who participated in the discussion, said this new option should be an effective tool for those with “modest to poor means.” <\/p>\n
irs officials warned that revenue officers also will be doing more fieldwork, such as asking to view assets. irs collectors also plan to be more vigilant about deadlines, getting away from continual extensions, mr. bennett said.<\/p>\n
claudia hill, principal and owner of tax mam inc. of cupertino, calif., said she hopes that practitioners are given enough time to gather information to support their clients’ cases. <\/p>\n
“doing research to prepare documents isn’t a delay and shouldn’t be looked at that way,” she said. <\/p>\n
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