IRS to use private debt collectors amid huge telephone scam

Debt collectors are coming ... for your years-overdue unpaid federal taxes. And they "must be courteous and must respect taxpayer rights", according to the agency.

Current and prior year tax forms and instructions are available on IRS.gov.

Only four firms are authorized by the IRS.

If you feel your taxpayer rights have been violated or if you've fallen prey to a tax scammer, the IRS recommends registering your complaint with the Treasury Inspector General for Tax Administration.

The program will begin this week with a few hundred taxpayers receiving mailings and subsequent phone calls, with the program growing to thousands a week later in the spring and summer.

On March 24, at 4:45 in the afternoon, Cheryl Willette received an alarming message on her voicemail. Affected taxpayers will only be assigned to one of them. During this time, the IRS won't come after you for your missing taxes provided you keep up with the terms of your agreement.

"Subjecting taxpayers who are struggling to make ends meet and can't afford legal representation to private contractors whose sole motivation is to maximize their own profits at the taxpayers' expense is a recipe for disaster", Reardon said.

People who receive calls they believe to be fraudulent should hang up immediately. Also keeping an eye out will be the National Taxpayer Advocate and the Treasury employees' union, both of whom have expressed strong reservations about the program's cost-effectiveness and how it's structured, among other things. "Runners" in the USA were responsible for getting scammed funds into bank accounts, a laundering process aided through wire transfers and prepaid debit cards. Contribute as much as you can afford to your IRA and your 401 (k) or other employer-sponsored retirement plan. The IRS said officials spent the past year or so designing the program and going through the federal process of selecting the private debt collectors.

If you pay less than 90 percent of what you ultimately owe, the IRS will impose penalties on the unpaid amount. One way to tell if you're talking to a real collection agency or a scammer: All checks for back taxes are written directly to the IRS.

"They said I owed back taxes for the period 2010-2016 and told me I owed $6,821".

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The callers, he said, "are the worst of the worst, and it's only going to get worse for the next two weeks". Because that's a pretty obvious - and honest - mistake, the IRS will typically send what's known as a CP2000 letter proposing an adjustment to your taxes.

Anyone calling and demanding immediate payment by prepaid debit card, gift card or wire transfer - or asking for your credit card or debt card number - is a fraud.

"I want people to know this is happening and what they should do in the event that this happens to them", she said. But remember that an extension gives you an extra six months to file your paperwork, but not an extra six months to pay any taxes due.

The law provides most taxpayers with a three-year window of opportunity for claiming a refund.

If one of these agencies working with the IRS threatens you or harasses you, then you need to report that to the Federal Trade Commission. Filing for an extension with form 4868 grants a filing extension, but does not defer payment of taxes that are due.

Don't file a late tax return.

· Some struggling taxpayers may qualify for an offer-in-compromise.

Tax evasion is the illegal practice of willfully defrauding the IRS by not reporting income or not paying income tax on one's earnings, either in part or in full. The IRS looks at the taxpayer's income and assets to make a determination regarding the taxpayer's ability to pay.

Of course, Tax Freedom Day is something of a fiction, in practical terms, because most people pay their taxes throughout the year via payroll deductions. "It's better to reach out to us sooner rather than later for help, because interest and penalties on unpaid taxes can add up quickly".

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