D. Scott Caruthers Discusses the IRS, Outsourced Debt Collections, and the Informed Approach of Gilroy Residents

Over the course of the past few months, taxpayers across the United States have been receiving calls from private debt collection agencies working on behalf on the IRS. Many of those on the receiving end of the calls have been understandably confused, especially those unaware that the IRS recently obtained the authority under federal law to outsource debt collection to private agencies.

Prior to the 2015 law passed in Congress, it was widely understood that any call purporting to be made on behalf of the IRS was nothing more than a scam and could therefore be immediately dismissed. It is hardly a surprise that these recent changes have created a host of difficulties for taxpayers and collection agencies alike, and many taxpayers have been taken aback to learn that the calls they had previously dismissed as attempts at fraud were indeed legitimate efforts made on behalf of the IRS.

As D. Scott Carruthers noted, there is ample reason for consumer advocates to be concerned about these circumstances. According to Carruthers, a lawyer who specializes in debt collection law, the fact that the IRS is now outsourcing debt collection to private companies could add a seeming air of legitimacy to the efforts of fraudsters, making it difficult for consumers to distinguish a legitimate collection effort from a fraudulent one.

While a host of experts -- including Carruthers -- agree that these concerns are quite valid, the longtime debt collection lawyer also pointed out how the residents of Gilroy and other cities throughout the state of California have created effective safeguards against fraudulent activity. A number of communities all over the state have held informational meetings detailing how to identify a legitimate collection effort as well as a fraudulent effort.

In cities like Gilroy, residents are keenly aware that the IRS has outsourced its collection efforts to just four agencies, and that Performant, which is located in the Bay Area, is most likely to handle debt collection efforts. Residents also understand that any private agency working on behalf of the IRS is required to adhere to certain guidelines stipulating that the agency cannot make threats or otherwise demand an immediate payment, and they certainly cannot request personal information like credit or debit card numbers.

According to Carruthers, who praised the collective efforts of community members throughout the state, confirming the existence of an outstanding debt with the IRS is one the most effective strategies for guarding against fraud. The IRS does in fact mail out official letters informing taxpayers of an outstanding debt that has been outsourced to a private collection agency, but consumers can seek further confirmation or arrange payments by simply accessing the IRS.gov website at their earliest convenience.