Date IRS Records the Assessment, Not Date Taxpayer Consents to Immediate Assessment, Controls Statute for IRS to Collect the Tax

January 04, 2020 by Ed Zollars, CPA

In the case of United States v. Kohls, Case No. 3:18-cv-00225, US DC SD Ohio[1] the executor of the estate argued that the IRS had failed to file its action timely. The IRS was looking to collect over $320,000 in unpaid estate taxes, penalties and interest due on the estate tax return. The issue turns on the date when the tax had been assessed, and whether the IRS was still within the time period imposed under IRC §6502(a)(1) to collect the tax following assessment.

Private Collection Agency Assignments Begin, IRS Issues Description of Program and Scam Warning

April 06, 2017 by Ed Zollars, CPA

The IRS announced the beginning of the use of private collection agencies to collect overdue taxes in News Release IR-2017-74. The program, mandated by Congress in late 2015, requires the IRS to transfer certain overdue accounts to private collection agencies.

The release begins by describing how the program will work, noting that the IRS will first notify the taxpayer that their account is being transferred to a private agency and will send along Publication 4518 to describe the process for the taxpayer in question.

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IRS Releases Letter to Be Sent to Taxpayers Assigned to Collection Agency

February 24, 2017 by Ed Zollars, CPA

The IRS has released a copy of the letter that they will send when accounts are sent to an outside collection agency. The new letter, Notice CP40, will be used when the IRS forwards accounts to a collection agency in the cases Congress required that step to be taken when it passed the Fixing America’s Surface Transportation Act in December of 2015.

The form will assign the taxpayer a “Taxpayer authentication number” which will be found in the upper right section of the first page of the notice. The first five digits of that number will need to be provided to the collection agency before the collection agency will be able to assist the taxpayer. This will serve to confirm to the agency that the person on the phone is the taxpayer. The agency will then recite the final five digits of the taxpayer authentication number to allow the taxpayer to confirm that the collection agency is the party calling.

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IRS Announces Beginning of Congressionally Mandated Use of Private Collection Agencies in Spring 2017

September 27, 2016 by Ed Zollars, CPA

The IRS in News Release IR-2016-125 provided information regarding the use of private debt collectors to pursue unpaid taxes mandated by Congress in the Protecting Americans from Tax Hikes Act of 2015.

The IRS had been mandated to begin using the private agencies earlier this year, but the IRS has delayed the beginning of the program and will, per the announcement, begin using the agencies in the spring of 2017, though an exact date for the start was not announced.