IRS is now turning some tax collection efforts over to private collection agencies. There are currently 3 firms authorized to pursue collections for the IRS but their efforts are going to be extemely limited insofar as what they can do to effect collections. In the first place, they can't actually collect any money! In the event a taxpayer chooses to pay up the checks or whatever have to be made out to the IRS who then pays the contractors a set percentage of the money collected.
But the question that most interests us is whether or not they are under FDCPA or not and therefore liable to being sued under FDCPA for any violations they might commit and the answer is no, they are not under FDCPA because it is not a consumer debt.
But here is what they are subject to:
Only a portion of the FDCPA is incorporated into collection practices under Title 26 of the US Code (IRC). Though any private right of action would not fall under the FDCPA, but rather IRC Sec. 7433
Sec. 6304. Fair tax collection practices
TITLE 26, Subtitle F, CHAPTER 64, Subchapter A, Sec. 6304.
STATUTE
(a) Communication with the taxpayer
Without the prior consent of the taxpayer given directly to the Secretary or the express permission of a court of competent jurisdiction, the Secretary may not communicate with a taxpayer in connection with the collection of any unpaid tax -
(1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the taxpayer;
(2) if the Secretary knows the taxpayer is represented by any person authorized to practice before the Internal Revenue Service with respect to such unpaid tax and has knowledge of, or can readily ascertain, such person's name and address, unless such person fails to respond within a reasonable period of time to a communication from the Secretary or unless such person consents to direct communication with the taxpayer; or
(3) at the taxpayer's place of employment if the Secretary knows or has reason to know that the taxpayer's employer prohibits the taxpayer from receiving such communication. In the absence of knowledge of circumstances to the contrary, the Secretary shall assume that the convenient time for communicating with a taxpayer is after 8 a.m. and before 9 p.m., local time at the taxpayer's location.
(b) Prohibition of harassment and abuse
The Secretary may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of any unpaid tax. Without limiting the general application of the foregoing, the following conduct is a violation of this subsection:
(1) The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.
(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.
(3) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.
(4) Except as provided under rules similar to the rules in section 804 of the Fair Debt Collection Practices Act (15 U.S.C. 1692b), the placement of telephone calls without meaningful disclosure of the caller's identity.
(c) Civil action for violations of section
For civil action for violations of this section, see section
7433.
The enforcement powers of the IRS are limited to Title 26. And, as powerful as the IRS may be, they cannot supercede the courts intepretation of the law, and the courts have consistantly upheld the FDCPA does not apply to the collection of unpaid taxes.
Enforcement of the FDCPA rests with the FTC, and individual persons acting as attorneys general as authorized by the Act.
Of course, I would be happy to review any actual authority you might care to cite to the contrary, other than a public relations news article.
Authoritative sources of Federal tax law are in the statutes, regulations, and judicial decisions, and not in informal publications issued by the IRS. (Zimmerman v.Commissioner, 71 T.C. 367, 371 (1978)) affirmed 614 F.2d 1294 (2d Cir. 1979)
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