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New senators are concerned about private debt collector abuse linked to the IRS. Debt collector abuse can take many different forms and it can also allow consumers who have been negatively affected to pursue legal action.
Four Democrats in the United States Senate have already drafted a letter to the companies who were hired by the Internal Revenue Service to collect tax debts.
This comes as a result of debt collector abuse claims that allege employees encourage people to use money from their retirement funds or to take out second mortgages in order to pay tax debts off.
The debt collector abuse claims that these are risky financial moves made on behalf of employers.
Although the IRS has abandoned private debt collector agency use in the past because of similar problems, Congress asked them to reopen that program. Many consumers believe that these agencies overstep their bounds and make illegal and aggressive statements over tax debts.
The Federal Trade Commission has been asked to participate in a review of these allegations due to claims from consumers that these companies are crossing the line.
The debt collector abuse claims have prompted requests from legislators to carry out a Fair Debt Collection Practices Act review of the telephone scripts used by the four private debt collection companies that were hired by the IRS.
The review will look at the scripts used by employees when contacting taxpayers about tax debts. The senators coming forward to protect those who may have been affected by debt collector abuse allege that the call scripts may include numerous threats to taxpayers, inadequate responses to seize and desist requests from taxpayers and violations of taxpayer privacy protections due to the information that is ultimately shared with third parties.
Further investigation, according to the senators behind the request, will reveal common issues with these calls and whether or not the line is being crossed when the companies contact consumers directly about past tax debts. Consumers have contacted legislators more often in recent years with these kinds of allegations.
A 2015 act included a provision that required the IRS to work directly with private debt collection agencies.
Although the IRS has previously identified that these private companies do not collect as much tax revenue as originally anticipated.
Congress required the IRS, however, to give the private debt collection program another chance and four private contractors were hired to collect tax debts.
Numerous complaints of debt collector abuse were lodged by consumers who contacted their legislators, claiming that the employees on the telephone scripts requested that consumers do anything possible to pay off their tax debts including risky financial moves.
Anyone who has been subject to debt collector abuse may have grounds for a legal claim of their own and consulting with an experienced attorney like those at McDonald Worley may be the only way to figure out next steps to move forward.