Is your small business behind on tax payments? Pretty soon you may get a call from a private debt collector instead of the IRS. A highway bill was released last week with a provision that forces the IRS to use certain private companies to collect taxes. This debt-collection provision is attached to a $305 billion, five-year highway bill. The Senate is set to vote on the bill soon, and House Speaker Paul Ryan believes the bill will have “good majority support.” But the bill has created contention on Capitol Hill and within the IRS.
President of the National Treasury Employees Union, Tony Reardon, is dissatisfied with the potential bill. He recalls that using private collection agencies for federal tax collection was tried twice in the past 20 years, but the government lost money both times. In 2014, the IRS Commissioner John Koskinen testified that using private collectors cost the government considerable revenue between 2006 and 2009. Koskinen blames the aggressive collection practices of private collection agencies.
But according to the Congressional Budget Office, the bill is supposed to generate $4.8 billion in 10 years. In addition, the highway bill would also deny or revoke the passports of taxpayers who owe the government over $50,000 in taxes. This provision is designed to motivate delinquent citizens to pay what they owe.
If the bill does pass, it could mean that Americans who have never dealt with private collection companies, will now have to discuss tax collection with private companies and not the IRS. But this also creates an opportunity for debt collection merchants to work in the tax collection field.
If you have a debt collection business, there is a high demand for your services. A great deal goes into staying on top of the various state and federal laws. Debt collection companies without the ability to process a variety of payments will suffer. EMB is an online payment processor that provides payment processing solutions like debit and credit card processing, ACH payment processing, and iCheck to make payments easier for your customers.