February 1, 2023 - Douglas Myser


IRS used private collectors targeted poor. TIGTA, the Tax Inspector General for Tax Administration, asked the IRS to stop over 14,000 low income taxpayers from Private Collection Agencies. The use of Private Debt Collectors first started under the last Bush Administration, but was called off after it was determined that the Private Agencies were not adhering to the Taxpayers Bill of Rights, which enshrined into law certain rights taxpayers have, and those Private Collectors were violating them in mass. TIGTA cited the IRS code section 6303(d) which would disallow those agencies from collecting debt from those poor individuals, based on the income levels they were at. IRS used private collectors targeted poor.

In its audit report, TIGTA said it found 14,141 taxpayers whose accounts should be recalled from Private Collections. This was based on the Taxpayer First Act, which codified the low income law. But the IRS disagreed saying those accounts were assigned before the date that law came into effect. TIGTA stated that it didn't matter, as those taxpayers income is not sufficient for collections. TIGTA further stated that the IRS was not following the plain letter of the law, which provides that "a tax receivable shall not be eligible for collection if the adjusted gross income of the taxpayer does not exceed 200 percent of the applicable poverty line." TIGTA stated that the IRS Director, Collections, Small Business/Self Employed Division, should "ensure that programming is in place to recall accounts of taxpayers who reflect income beneath the legal amount required for Private Collection Account."


If the IRS is resisting this, it may be a portend of things to come, as the Inflation Reduction Act, hiring 87,000 new IRS employees, shows they are gearing up for more aggressive collections. If you one of the U.S. citizens who have Unfiled Tax Returns, you may consider Tax Resolution Services as an alternative to help you with your problem. That way you can avoid a IRS Wage Garnishment.