Clock ticking on 2016 income tax return

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"It's been clear for a long time that the IRS isn't collecting the debt that these contractors will focus on".

All of this is why the IRS web page about the shift to private collection devotes a lot of space to avoiding scam artists.

These days, you can file online in your pajamas at the stroke of midnight on Tax Day, but you may end up paying more to file. "It replaces a 20-year-old procedure in which the account would have gone through a series of collection steps involving levies, liens and offsets against the taxpayer", he said, adding that the new effort allows department collectors to focus their attention elsewhere.

In order to avoid errors on their forms, the IRS encourages people to apply electronically, check their math and include the correct routing and account numbers, among other things. Then the debt collection company will send letters before calling on the phone. If the account balance says zero, that means nothing is due, and you typically wouldn't be getting a contact from the IRS or the private firm. After that, the money becomes the property of the U.S. Treasury. With tax season coming to a close, some people haven't filed yet.

If you can't come up with the money by April 18, you should still file a tax return or request an extension. No other private group is authorized to represent the IRS.

The four companies the IRS has selected to handle collections are CBE, ConServe, Performant and Pioneer.

Proportional taxes affect every taxpayer equally, regardless of their income, such as a flat tax. "That way, if you've got your information in and you get a phone call, you're already ahead of the game", Hill said. The IRS will also charge you 4.5 percent per month during the first 5 months you are late with filing your return. They were hired by the government to track down delinquent payers. That's because the IRS had a rule that they would never ask for payment information over the phone.

Adjusted Gross Income: If taxpayers changed tax preparation software this year, they may be asked for their adjusted gross income to help verify their identity. "One thing to note is that checks are not made out to the Internal Revenue Service, only to the United States Treasury".

Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The collectors must still respect taxpayer rights and follow the provisions of the Fair Debt Collection Practices Act. "We also learned it's important for us to share enough information with the private collection agency so they can work the case to completion". (The hours are based on the caller's local time).

However, many people don't know that there are certain deductions, known as "above-the-line" deductions or adjustments to income, that all taxpayers can take advantage of, regardless of whether they itemize or take the standard deduction.

Filing for an extension will give you until October 16 to file your tax return.

You also may want to register your complaint with the Consumer Financial Protection Bureau, which has a database of more than 700,000 complaints, a quarter of which pertain to debt collectors.

Another reason to offer feedback is this program is essentially an experiment and the IRS and lawmakers are watching it closely.