The Internal Revenue Service (IRS) has always been involved when it comes to money trails and it is a vital factor that enforces legal means to only be used when it comes to monetary dealings.
Recently, it became public knowledge that the IRS is hiring third party debt collectors. This was one main reason: convenience. No matter how vast or resourceful the IRS network may be, it’s still not easy for the institution to keep a check and balance of all debtors. This creates several pit holes for the IRS where a number of payments can be missed simply because the indebted clients could not be reached as they slipped into these pit holes.
In 1996 and then again in 2006’ the IRS attempted to outsource to outside agencies but the venture was shut down by the government. But in 2015, Congress passed a bill that allows it to outsource.
In order to create a larger task force, the IRS has hired four third party debt collectors to represent the organisation and collect payments on their behalf.
As with every venture in the business world, every action has several highs and lows. Same applies to this step taken by the IRS. Mentioned below are some of them:
Benefits of Hiring Third Party Debt Collectors
– It makes the process of debt collection much easier and the division of labour can be done in a more balanced way.
– It allows the IRS to have a much greater reach to clients spread all over the country.
– According to recent agency data, a staggering sum of $138 billion dollars is owed to the IRS by various 14 million accounts. Hiring private debt collector companies seems like the only solution to make a dent on this delinquent tax money.
Disadvantages of Hiring Third Party Debt Collectors
– The IRS is strictly restricted when it comes to approaching clients that owe money. It can’t call them, for example. But these outsourced companies can, which means they are free to harass clients as much as they like without having to answer anyone.
– The outsourcing companies can employ any number of methods to collect overdue taxes. Debt collection may be done through phone calls, emails, letters and even visits to the person’s place of work and residence. All of this will inevitably result in great annoyance of the people and will make them even more reluctant in paying the money.
– It creates big room for fraud. Many fraudulent persons and organisations can easily impersonate the IRS and extort large sums of money from vulnerable clients.
– In both previous attempts by the IRS to outsource, it lost millions of dollars because the upkeep costed much more than the recovered money.
These are the facts on the IRS hiring third party debt collectors. Form your own opinion based on these facts and let us know what is your take on this bold step.