International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Saturday, November 28, 2015

Congress Requires IRS To Use Private Collection Agencies

Congress, as part of the forthcoming Transportation (and numerous other non-transport provisions, such as the re-authorization of the Ex-Im Bank) Act, will require the Internal Revenue Service (IRS) to contract with private collection agencies to collect payments of certain tax liabilities and compensate them with a portion of the amounts collected. Full text here.

(a) Requirement To Collect Certain Inactive Tax Receivables Under Qualified Tax Collection Contracts.—Section 6306 of the Internal Revenue Code of 1986 is amended by redesignating subsections (c) through (f) as subsections (d) through (g), respectively, and by inserting after subsection (b) the following new subsection:

 “(c) Collection Of Inactive Tax Receivables.—

“(1) IN GENERAL.—Notwithstanding any other provision of law, the Secretary shall enter into one or more qualified tax collection contracts for the collection of all outstanding inactive tax receivables.

“(2) INACTIVE TAX RECEIVABLES.—For purposes of this section—

“(A) IN GENERAL.—The term inactive tax receivable means any tax receivable if—

“(i) at any time after assessment, the Internal Revenue Service removes such receivable from the active inventory for lack of resources or inability to locate the taxpayer,

“(ii) more than 1⁄3 of the period of the applicable statute of limitation has lapsed and such receivable has not been assigned for collection to any employee of the Internal Revenue Service, or

“(iii) in the case of a receivable which has been assigned for collection, more than 365 days have passed without interaction with the taxpayer or a third party for purposes of furthering the collection of such receivable.

“(B) TAX RECEIVABLE.—The term tax receivable means any outstanding assessment which the Internal Revenue Service includes in potentially collectible inventory.”.

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