IRS Private Debt Collection Agency Outsourcing

IRS Private Debt Collection Agency Outsourcing

Beginning in Spring/Summer 2017, the Internal Revenue Service (IRS) will begin implementing the use of private debt collection agencies to settle certain tax debts.  

The private debt collection agencies will need to abide by the Fair Debt Collection Practices Act and must respect taxpayer rights.  Four private debt collection agencies have been contracted by the IRS for the purposes of pursing those accounts where taxpayers owe money, but there are various factors involved where the IRS can no longer actively pursue them; such as older, overdue tax accounts.  The four agencies that have been contracted are CBE in Waterloo, Iowa; ConServe in Fairport, New York; Performant in Pleasanton, California; and Pioneer in Horseheads, New York.

There are situations where a tax account will not be transferred to private debt collection agencies: (1) the taxpayer in question is deceased, (2) under the age of eighteen, (3) a victim of tax-related identity theft, (4) in a designated combat zone,  (5) currently under examination, litigation, criminal investigation or levy, (6) where the taxpayer is subject to pending or active offers in compromise, (7) subject to an installment agreement, (8) subject to a right of appeal, (9) classified as an innocent spouse case, or (9) in presidentially-declared disaster areas and requesting relief from collection.

Before your tax account is assigned to a private debt collection agency, the IRS will give you and your representative, if applicable, written notice that the account(s) will be transferred to a private debt collection agency.  The agency will also send you a separate letter confirming that the IRS has transferred your tax account to them.  

These agencies will have the ability to identify themselves as contractors of the IRS.  Before receiving any phone calls, you should have previously received written communication from both the IRS and the private debt collection agency assigned to your account.  Although the IRS will be transferring your tax account to be handled by a private debt collection agency, you will not pay the collection agency directly to settle your tax debt.  Instead, you will pay the IRS directly either electronically through the IRS website or by check payable to the U.S. Treasury.  

In order to protect yourself from scams, it is imperative to know that you should receive written communication from the IRS before receiving any phone calls and that you should ensure your payment is sent to the IRS and not to a third party.

What does an Executor Do?

What does an Executor Do?

An executor has a multitude of responsibilities. Some include submitting the will for probate, gathering and evaluating the estate assets, opening an estate checking account, paying debts, filing tax returns, and distributing the assets to beneficiaries. The first step is for the executor to submit a will for probate. You must submit the will to the county Surrogate where the deceased resided at the time of death. The Surrogate will issue Short Certificates, or Letters Testamentary, allowing for the executor to start the process and act on behalf of the estate.

The executor must gather and evaluate the assets, analyze debts owed by the estate, and notify the next of kin through the Notice of Probate. Taxes may be due on the estate, depending on the gross value of the estate and who the beneficiaries are. New Jersey may issue a lien on the bank account to ensure the tax requirement is fulfilled. New Jersey taxes both estates and inheritance. If the gross estate, barring debts and expenses, is $675,000 or greater, a tax return must be filed. If the net estate, after deductions, including debts and expenses exceeds $675,000, estate tax is due. If you are not a spouse, civil union partner, child, stepchild, parent, or grandparent, inheritance tax will be due. A tax return will most likely be filed depending on your class and how much you are receiving.

When finalizing the estate, a general accounting of assets and debts will take place. The beneficiaries will approve the details and file a Release and Refunding Bond, which acknowledges the receipt of distribution and the agreement to return any portion of their inheritance in the case of unexpected debt or unforeseen estate expenses after the allocation has been made.

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