Being in debt is a stressful circumstance that collectors can often intensify with unfair practices. Therefore, the Fair Debt Collection Practices Act (FDCPA) prohibits companies from using such practices to collect debts from you.
What Does the FDCPA Cover?
Mortgages, credit cards, medical, and personal debts are all covered by the FDCPA. The collectors that are prohibited by this act include the following:
Lawyers who regularly collect debts as part of their business
Other entities that buy past-due debts from creditors to collect them
Business debts are not covered by the FDCPA. It also doesn’t cover collection by the original creditor that you’re indebted to.
FDCPA Communication Restrictions
Debt collectors are not allowed to contact you under certain circumstances.
Harassment: Debt collectors cannot harass you over the phone or by any other form of contact
Inconvenient Times: Debt collectors may not contact you at inappropriate hours or places. This includes before 8:00 a.m. and after 9:00 p.m. Contacting your place of work is also not allowed under the FDCPA.
Power of Attorney: Once you have attorney representation, the collector must cease contact with you. The attorney is now responsible as the main point of contact regarding your case. If you are contacted by a collector, you should inform them that you’re represented by an attorney and give them the attorney’s name.
Once you tell a collector to stop contacting you, they can only contact you to inform you that there will be no further contact, or to notify you that legal action (such as a lawsuit) is taking place.
The collector calling you for a payment is required by law to inform you about the debt. Things they should share include:
Identify the creditor (name and address of current or former creditor)
That you can dispute the debt
FDCPA and Tax Debt
The IRS must also abide by the Fair Debt Collection Practices Act. You have rights as a taxpayer that restricts their communication and enforcement practices. If you have unaffordable tax debt and need assistance with your case, give Optima a call for a free consultation at 800-536-0734.
Worried about the IRS garnishing your refund? There are a few instances where this could happen. CEO David King and Lead Tax Attorney Phil Hwang discuss these circumstances and what you should do if you’re thinking your refund could be at risk for IRS seizure.
The responsibility of payroll taxes falls on the shoulders of employers, although they come from employee paychecks. The federal government, Social Security and Medicare heavily rely on taxes from employee wages.
IRS revenue officers are now tracking how unpaid payroll taxes were spent during their “trust fund investigation.”
Payroll Taxes Used for the Employer’s Benefit
Employers will now face more penalties for spending payroll tax money for their own benefit, or pocketing it for themselves. Maintaining a luxury lifestyle while owing payroll taxes can now lead to prosecution.
Revenue officers are being instructed to pull employer 1040 tax returns to learn whether the money that benefited them was reported as income. If the money was not reported as income, the RO will submit the returns and investigation records to the civil audit division. Another option is that the RO will refer the case to the IRS Criminal Investigation Division to review for criminal prosecution. The course of action made by the RO depends on the severity of the case.
What This Means for Business Owners
Business owners should utilize their tax professionals and seek advise to avoid any possible criminal activity. It’s important to review and track where the payroll money goes for the year. If you know that some of your payroll tax money went to yourself as an employer, you should prepare to amend your income tax returns before the IRS catches up to you.
Avoiding handling this matter could put you in a worse financial situation, or even lead to prosecution.
Payroll Tax Debt
If you are currently in unaffordable tax debt, Optima’s team of tax professionals may be able to aid your case. Give us a call at (800) 536-0734 for a free consultation today.
Many taxpayers are hesitant about calling the IRS for several reasons, including the long wait time to speak with a representative. A phone call could take hours that you may not have to spare in your day to get answers to simple questions. The IRS launched what they believe to be the answer to this problem: voice bot options.
How the IRS Voice Bot Works
Generally, voice bots are artificial intelligence that allow callers to interact using verbal responses. Taxpayers with simple questions about payments, notices and other tax related inquiries can now avoid waiting for a live person to become available.
The voice bot offers services in both English and Spanish, aiding a large percentage of Americans.
Which Lines Have a Voice Bot?
While the IRS states that numerous lines now have voice bot options, it seems this feature will best be suited for Automated Collection System toll-free lines, Accounts Management, discussing payment plan options, and frequently asked questions.
So far, the voice bot has answered over 3 million calls. The IRS continues to add functions to help more taxpayers resolve their issues quickly.
Future Voice Bot Enhancements
Upcoming 2022 enhancements for the automated feature includes:
Account and return transcripts
Current balance owed
The Economic Impact Payment line will also have responses for frequently asked questions.
Need more assistance?
Optima’s tax professionals may be able to assist you with your tax debt and help you reach IRS compliance. Give us a call at (800) 536-0734 for your free consultation today.