The IRS has various collection tools at their disposal when it comes to collecting on unpaid taxes. One such tool is to send a taxpayer’s case to a private debt collection agency (PDCAs). If you have received notice that your case has been sent to a PDCA, it is important to know what to expect and what your options are.
What Happens When My Case Is Sent To A PDCA?
Once your case has been sent to a PDCA, the agency will contact you to discuss payment options. The agency will also inform you of your rights under the Taxpayer Bill of Rights. It is important to remember that the PDCA is not affiliated with the IRS and does not have the authority to garnish wages or seize property. The PDCA’s job is simply to collect the outstanding debt.
What Are My Options For Repaying The Debt?
You have several options available to you for repaying the debt. You can make periodic payments, set up an installment agreement, or request a collection due process hearing. Each option has its own benefits and drawbacks, so it is important to weigh your options carefully before making a decision. You should also keep in mind that the sooner you pay off the debt, the less interest and penalties you will accrue.
If I Can’t Pay The Debt In Full, What Are My Other Options?
If you cannot pay the full amount of the debt, you can negotiate with the PDCA for a partial payment agreement or an offer in compromise. Under a partial payment agreement, you agree to make monthly payments until the debt is paid in full. An offer in compromise allows you to settle your debt for less than what you owe. Keep in mind that offers in compromise are difficult to qualify for and are often rejected. Now is a great time to look at all possibilities since the IRS kinda gave up on you and sent your bill to the PDCA.
If you have received notice that your case has been sent to a private debt collection agency, it is important to know what steps to take next. The agency will contact you and inform you of your rights and options under the Taxpayer Bill of Rights. You can make periodic payments, set up an installment agreement, or request a collection due process hearing. If you cannot pay the full amount of the debt, you can negotiate with the agency for a partial payment agreement or an offer in compromise. Keep in mind that offers in compromise are difficult to qualify for and are often rejected. No matter what option you choose, it is important to act quickly in order to avoid accruing additional interest and penalties on your outstanding balance.
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