Could the IRS Soon Have Debt Collectors After You?

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The Internal Revenue Service has asked Congress to approve a bill that would allow the tax-collecting agency to contract with private collectors to recover growing tax debts.

Long ridiculed for its inefficiencies and inabilities to collar all tax cheats, the Internal Revenue Service now means business.

After an aggressive attack earlier this year on offshore trusts, which resulted in 1,253 tax cheats stepping forward, the IRS has now asked the U.S. Congress to approve a bill that would allow the agency to hire private collection agencies to go after tax debtors.

The Chicago Tribune reported that the bill, if approved, “would allow the IRS to farm out about $13 billion in tax debt to private collection agencies, which could receive as much as 25 percent of what they bring in.”

This proposal, coupled with the success of the recent attack on offshore trusts, should give you pause if you currently have outstanding U.S. tax debt. It’s clear that the IRS plans to collect it.

You may be thinking that, for as large as our country is and with the number of people who pay taxes annually, you may be able to slip through the crack. After all, 26.3 million Americans owe taxes. Your odds may seem pretty good.

But you’d most likely be wrong. Despite the high number of Americans who still owe taxes, news comes out every day of debtors and tax cheats busted by federal authorities.

Consider :

Lisa Jo Baird, the former CEO and a former board member of the nonprofit Redwood Family Clinic, who faces up to seven years in prison and a $350,000 fine for embezzlement and filing a false income tax return. In fact, authorities were so keen on nabbing Baird that they arrested her as she got off a plane from Vancouver.Tracy Renay Byron andReginald Dewayne Byron, of Birmingham, Ala., who were both sentenced to over two years in prison for filing false income tax returns.Virgil E. Duncans, 60, of Griffin, Ga., who faces up to 10 years in prison and a $500,000 fine for making false statements on his income tax return.

This is all meant to illustrate what my colleagues and I have been telling our clients for years: The IRS isn’t inefficient or unable to collar tax cheats. It’s an aggressive agency that is trying new programs to perfect its tax-collecting capability.

Don’t underestimate the IRS. The next knock on your door could be an IRS agent — or one of those private debt collectors wanting to know where your money is.

Fess up. Come clean. Consult a tax professional. Your time could be running out.

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