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Bid to End Private Tax Collection Dies

Nov 24

Posted by admin in Personal Finance

An initiative to farm out tax collection to private agencies survived a challenge Thursday from House lawmakers who said the program was improper and should be eliminated, The Associated Press reported.

Defenders of the private debt collection program used a procedural move to strip from a Treasury Department spending bill a provision saying the Internal Revenue Service could spend no more than $1 million next year to operate the program, which would have effectively shut it down, the AP reported.

Rep. Jim McCrery, R-La., top Republican on the Ways and Means Committee, cited estimates that the IRS could lose $69 million in 2008 if the program, which began operations in September 2006, were dismantled, the AP reported.

”The whole notion of having private debt collectors collecting taxes throughout this country does not sit well with a lot of people,” said Rep. Jose Serrano, D-N.Y., a leading opponent, according to the AP. Even with careful supervision, he said, taxpayers will eventually see ”all kinds of tactics we will live to regret.”

Currently the IRS has contracted with two private agencies, but it’s looking to expand the program this year, the AP reported.-New York State Society of Certified Public Accountants

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Dealing With Scam Artist Pretending To Be IRS Debt Collectors

Mar 28

Posted by admin in Taxes

In 2004, the IRS was given the authority to use third party debt collectors to hunt down taxes owed by delinquent taxpayers. Scam artists knew an opportunity when they saw one.

Dealing with Scam Artist Pretending To Be IRS Debt Collectors

In an effort to track down delinquent taxpayers, the federal government gave the IRS the right to hire private debt collectors in 2004. You know, those annoying people that call during dinner. The reason for this change in policy actually made some sense. With as much information as the IRS is forced to deal with, it simply took forever for the IRS to start collection actions. By using the third parties, the IRS would be able to get the process moving without taking up employee time.

As you might imagine, the private tax debt collector program sounded like a good idea, but proved to be problematic. There were two primary problems. First, the legitimate debt collectors were threatening taxpayers. Second, scam artists started posing as debt collectors to collect money from na’ve tax collectors or perform identify theft on them. It is this second problem that we focus on here.

The central problem with the new debt collector program is how does a taxpayer know if they are dealing with a legitimate company or a scam artist trying to rip them off? Well, the IRS has instituted a new program in an effort to clarify matters. Here are the highlights:

1. If the IRS is going to use a private debt collector to come after you, the agency will first send you a letter indicating as much. The name of the company handling the debt collection will be included in the letter. If you do not receive this letter, ignore or report any parties claiming to be debt collectors to the IRS immediately. Play along and get their contact information so the IRS can hammer them.

2. When dealing with the debt collector, you will eventually reach a point where you write a check. The check should be written to the United States Treasury. If the debt collector instructs you to write it to any other name, they are scam artists and you should report them immediately. There is no exception to this rule. All payments are made to the United States Treasury, just like if you had actually paid your taxes on time!

Scam artists are very creative when it comes to thinking up schemes for ripping people off. Understand and stick to the following guidelines and you can foil them.

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Your Best Bet For Debt Might Be Student Loan Consolidation

Feb 10

Posted by admin in Debt Consolidation

Cash is hard to get a hold of these days for everybody who tries to maintain the standard of living. In the past, loans carried you through college, but now that you’re out these debts have come out to haunt you. You may be contacted by various debt collectors and left a frantic mess seeking someone who can help you with a school loan consolidation.

The majority of students that have just finished their education and are currently looking for jobs try for federal school loan consolidation first. This loan is beneficial in a number of ways. First, the government is the source of this loan but it is issued by private lenders. That means that the time you have to repay the loan can be extended for a long duration.

Perhaps the most enticing benefit of school loan consolidation is that the multiple student loans are substituted with just one loan. The overall sum of the debt is reduced; at times this reduction can even go up to 60%. This, of course leads to reduction in your monthly payment.

Even better, the new rate of interest is founded on the weighted average of the rates that apply on your present loans. You’ll also be rid of the mental stress connected with remembering the details about multiple loans. Consolidation does not require a cosigner or any checking of the credit score, and you can utilize this opportunity to improve the credit score or rating.

The only con of the situation is that is it is very difficult to prove yourself eligible for the federal school loan consolidation. Typically, you will need the assistance of a good debt consolidation expert to prove that you are eligible for this kind of consolidation. The standards to be qualified for this loan are very rigid, leaving many ineligible for the loan. Nevertheless, it is worthwhile to check to see if you qualify. It could be a good resource for protecting your finances in the future.

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