Friday, February 22, 2008

Will this New Form of Tax Fraud Ensnare You?

--Scam Artists most likely to Benefit from IRS Policy Shift

Magalia, California--Unleashed by the 2006 IRS private debt collection "initiative," the rumor mill is starting to fill up with stories of new tax scams. Fueled by the pest-power of private collection agencies, this "initiative" holds forth the promise (or threat, depending upon which side of the desk one happens to be sitting) of providing a new windfall source of revenue--to 3 parties: IRS, collection agencies, and scam artists.

Supposedly, assurances to the taxpayers involved--for this new inclusion of private collection agencies in the tax payment equaion-- are provided by IRS:

Taxpayer notification. IRS will notify the "selected" taxpayers before they are contacted by a private debt collection agency. The name of the company will be included in the notification letter.

Collection agency letter. All participants will receive a second letter, this one from the collection agency, informing the taxpayer that they will soon be contacted regarding back taxes.

Money collected. All checks will still be made payable to the U.S. Treasury--not to an individual or firm. The collection agency will provide the appropriate IRS mailing address for payments. They will never ask for cash or checks written to individuals.

Legal thriller author, Jack Payne, whose specialty is the study of scam artists and their operations, comments, "'Oh, ho, you say,' with a smile of satisfaction as one of the 'selected'. 'This assures me that I can't be ripped off.'" Payne continues, "Oh, yeah, sure You may find satisfaction that you will not be hounded in a way as to be victimized by scam artists. But, how about all the millions of other taxpayers who are unaware of these procedures? This is what opens up a whole new market to scam artists.

"What's to stop them from getting well-credentialed, and approach you waving a copy of this new initiative, and announcing that they have been charged by the IRS to collect back taxes on their behalf. They can lay down their own rules of process to these unwitting victims who have no knowledge of what these official rules are. It's as good as extending a license to steal to a whole new breed of scam artists.

"How about notification to every taxpayer of the proper, official procedure. Only then will the hand of protection to the new millions of scamable people be extended But, don't hold your breath. Remember, a pessimist is never disappointed. In the final analysis, when you put 2 common words together, 'the' and 'IRS' it spells, 'theirs.'

"It won't be long before we'll all be longing for the good old days when a tax audit meant, simply, going to an IRS office with, maybe, your attorney or accountant in tow, for an afternoon of good old-fashioned haggling.. Just you and IRS, no middle-man.

"But, If you do get on an IRS 'hit' list you now face a doubling-up, a collection agency to also bludgeon you. Every time you hit bottom it seems, somebody hands you a shovel. It will be most interesting to see how this new scam-fest will work out."

15 comments:

Personal Development Blog For Money said...

I actually don't know much about debt collection but isn't it proper to be notified first? At least they were notified... Unless there's something really fishy behind ...

Terry said...

Collection agencies are merciless...they will call you in the middle of the night. Looks like hassle time for back taxes is really here.

Bern said...

I know of a guy who was hounded to death by a collection agency under this new regulation. What's all this about owing your soul to the company store? Looks like it is coming to pass.

Jack Payne said...

Moral of the story, PDBM, is the big number of taxpayers who are not notified of this change in system, thus setting up a stage for scam artists to perform their new play on.

Jack Payne said...

Yes, Terry and Bern. When IRS extends a "helping hand" you expect to see it coming toward you palm up, not the back of it.

Lynn D said...

My daughter fell out of favor with I.R.S a few years ago over student loans. Now I am worried. I suppose her problems will only expand.

joderebe said...

Every time you hit bottom it seems, somebody hands you a shovel. Love this analogy Jack. Since I live in Canada this IRS initiative won't be an issue...I hope. You never know with the government eying how things work in the States.
~JD

Jamie said...

I hadn't heard of this and can see how many will be deceived. Thanks for bringing this to light, Jack. Always looking out for us "little people."

Enjoy your weekend!

Warmer said...

My favorite Jack Payne quote is put together the two words the and I.R.S. and you get theirs. This is fitting in describing the attitude of a government agency when dealing in terms of taxpayers money.

Jack Payne said...

I plead guilty to often using parallels, metaphores, similies, and axioms to strengthen the thrust of where I'm going in trying to make important points in my writing.

The singularly important point of this piece, however, was to pound home the unconscionable oversight by IRS of not notifying ALL taxpayers of this important shift in their policy--to involve private collection agencies in the taxing process.

It would have been so cheap and easy for them to have notified all taxpayers by mail when this policy was first introduced--so that everyone would be alerted and on their guard against possible scams.

You've got to wonder about the Agency's PR. Only a few news releases and practically no news coverage occurred at the time of this new policy's introduction.
Eighty percent of the people I talk to about this are not even aware of such a change in policy.

sharyn said...

you know that space we can write someone in for the president when there's no one else to vote for.....
i think we should write in JACK PAYNE, he's looking out for us more than any one else.

kab625 said...

Hi Jack,
Why am I learning about this here? Geez! Thank you.

Anonymous said...

A long time ago I took my two year old son to an I.R.S. audit. I plopped him down on the agent's desk, and he made such a pest of himself, playing with the agent's papers, letter opener, and such, that he said, okay, okay, okay lady. We settled for pennies on the dollar, anything to get my son out of his hair and us out of his office. I was so proud of the little fella. Now I wonder if this ploy would work with a collection agency person.

Jack Payne said...

Sorry, Sharyn. If nominated, I refuse to run. If elected anyway, I refuse to serve. Better luck next time. Appreciate the sentiments though.

Kathleen, complete details of this ground-breaking new I.R.S. program should have been widely disseminated to all taxpayers in 2006 when it was announced. It wasn't.

Jack Payne said...

Sorry, Sharyn. If nominated, I refuse to run. If elected anyway, I refuse to serve. Better luck next time. Appreciate the sentiments though.

Kathleen, complete details of this ground-breaking new I.R.S. program should have been widely disseminated to all taxpayers in 2006 when it was announced. It wasn't.