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Roadblock for private tax debt collectors

March 27, 2006

The IRS has issued a stop-work order to
three private debt-collection firms that were awarded contracts earlier this month to start going after unpaid tax bills. You can go here to read more about the contracts and why many, including yours truly, thinks such outsourcing is not such a good idea.

CCH, the publishing and tax software company, reports that the IRS put the brakes on the controversial collection plan after GC
Services LP and Diversified Collection Services, Inc., filed protests with the Government Accountability Office, which handles contracting
disputes involving any federal agency.

The complaining companies were among the 30 that did not make the initial cut in the contract process.

Private debt collectors, many of whom don’t have, shall we say, the
most savory of reputations when it comes to dealing with "customers,"
were slated to begin collecting on the IRS’ behalf this summer. The IRS
is hopeful that the timetable won’t be pushed back too far.

According to CHH, the IRS responded the to companies’ filings by saying "protests are not unusual in the procurement process." The agency also said it will continue to prepare for the use
of private debt collectors until the protest is resolved and will
"respond accordingly when (the) GAO issues its ruling."

Longer term,the IRS is looking to hire around seven more debt collection agencies by 2008 to go after what the IRS says will be "relatively simple cases" in which taxpayers have
acknowledged that they owe Uncle Sam.

But for now, the IRS has until April 17, the same deadline most of us also face to get our returns at least en route to the agency, to provide the GAO with a report on its side of the matter. The GAO has until June 26 to issue its decision.

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The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

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TAX-SAVVY WAYS 
TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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