* Please say it isn’t so! Kay Bell warns that “Private Debt Collectors Could Be Coming After Taxpayers Again” at DON’T MESS WITH TAXES.
Read my lips – The IRS, or a state tax agency, should NEVER be allowed to use an
outside collection agency to collect outstanding tax debt!!
A collection agency makes money by
collecting money from alleged debtors, whether or not the debt is genuine. A collection agency could care less if the
person they are dunning actually owes the money – they only care about
collecting money.
The function of the IRS, or a state tax
agency, is tax administration. They have
a fiduciary, and perhaps even legal, responsibility to make sure that any
alleged outstanding tax debts are genuine.
It has been proven again and again that
using an outside collection agency is not financially beneficial. The last two times the IRS tried this were
disasters, as Kay explains (highlights are mine) -
“The
1996 debt collector pilot program produced a $17 million net loss for Uncle Sam. Plus, the participating
collection firms were repeatedly found
to violate the Fair Debt Collection Practices Act.
A reboot authorized
as part of the American Job Creation Act of 2004 allowed the private debt collectors to keep up to 24 percent of what they
recovered as a bounty payment. It turned out such financial rewards again
prompted debt collector abuse and
harassment of taxpayers.
This second time, the government's net loss was smaller, only
around $4.5 million, but the private
debt collectors pocketed more than $16 million in commissions.”
My advice to anyone who is contacted by an
outside collection agency regarding an alleged tax debt has always been to tell
the agency that they refuse to deal with anyone other than the applicable
government agency.
* POLITICAL TICKER reports “Tax-writing Congressman Violated Tax Law”. It’s not
Chuck Rangel this time.
Republican Rep. Todd Young violated Indiana
state, not federal tax law, by “claiming
a property tax deduction for a house he didn’t live in”.
* Kay Bell, the yellow rose of taxes,
pondered the question “Are Child-Related Tax Breaks Appropriate, Fair?” in her
Mother’s Day post at DON’T MESS WITH TAXES.
I don’t believe we should tax married
couples differently than singles. There
should be neither a marriage tax penalty nor a marriage tax benefit - the Tax
Code should be marital-status neutral.
And, while I believe that the Tax Code should neither encourage nor
discourage having children, I do believe there should be some additional
deductions/benefits for families, or singles, with children and other
dependents.
* Laurie Ehlbeck, New
Jersey state director for the National Federation of Independent Business,
tells it like it is in a guest editorial in the ASBURY PARK PRESS titled “High Taxes Spur N.J. Exodus”.
Laurie points out that
-
“Between
2001 and 2010, New Jersey lost a net 179,000 income tax filers, according to
IRS data compiled by the nonpartisan Tax Foundation. They left with more than
$13 billion in adjusted gross income.”
Why the moves? NJ has very high state income taxes. And -
“Don’t
forget that New Jersey also imposes the highest property taxes in America, and
its sales tax is higher than all but a handful of states. Add it all up, and
moving out of New Jersey is an easy decision for the people who can most easily
move.”
* Jason Dinesen’s latest post at DINESEN
TAX TIMES - “Glossary of Tax Terms: Community Property” -only applies to
residents of Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas,
Washington and Wisconsin.
TTFN
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