IRS Use of Private Debt Collectors Begins April 2017

Beginning this month as result of federal legislation enacted in December of 2015, the Internal Revenue Service will begin using private debt collectors to collect certain outstanding inactive tax receivables. The Fixing America’s Surface Transportation Act, in fact, requires the use of private collection agencies for certain tax debt that the IRS is no longer actively working on collecting.

The IRS has announced that CBE, Conserve, Performant, and Pioneer and the four private collection agencies that will be assigned collection matters. With the ever-present risk of tax related scams, the IRS has provided guidance regarding the procedures when the accounts are transferred to the private debt collection agencies.

First, a taxpayer will receive written notices from both the IRS and the private collection agency indicating that the private collection agency will be handling the collection. The private collection agency representatives are also required to identify themselves as debt collectors and will be required to follow the Fair Debt Collection Practices Act.

Taxpayers who are contacted by a private debt collector should ensure that the contract is from one of the above listed private debt collection agencies and that they have received the proper notices listed above. In the event a taxpayer is contacted regarding a tax debt, you may wish to confirm the accuracy of such debt using the IRS’s new balance check, available at

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SEC Amends Form 10-K to Make Annual Reports User Friendly

The Securities and Exchange Commission (“SEC”) recently issued an interim rule that amends the Form 10-K; a form certain publicly traded companies annually file to give a complete review of the company’s business and its overall financial condition. The rule allows the registrant to include an optional summary page of the information that the form requires. Each item in the summary must include a hyperlink to a more detailed explanation in the filing.

The amendment is pursuant to the Fixing America’s Surface Transportation Act (“FAST Act”), which was signed into law in December 2015. The FAST Act requires the SEC to take various steps to simplify and modernize certain disclosure requirements. The amendment is effective as of June 1, 2016.

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Passport Revocation for Seriously Delinquent Taxpayers

The Internal Revenue Service has a new tool to encourage taxpayers to pay delinquent tax debts. If the IRS notifies the Secretary of State by certification that an individual has a seriously delinquent tax debt, the Secretary of State may deny issuing or renewing a passport or revoke the individual’s passport. IRC § 7345 is part of the Fixing America’s Surface Transportation Act and was signed into law by President Obama on December 4, 2015.

A seriously delinquent tax debt is an unpaid, legally enforceable federal tax liability greater than $50,000, which has been accessed and taxpayer has received a notice of lien or levy is made. Taxpayers are not considered to have a seriously delinquent tax debt if they are involved in settling their debt through an offer-in-compromise, installment agreement, or are legally contesting the debt.

If the IRS notifies the Secretary of State of such a tax debt, the Code also requires that the taxpayer receive the same notice. If the taxpayer believes the certification is erroneous, taxpayer may bring a civil action in federal district court or the tax court. If a court determines that the certification was erroneous, the court will order the IRS to notify the Secretary of State of such error. Additionally, if the IRS determines that such certification was erroneous or if the debt is satisfied or ceases to be seriously delinquent, the IRS must send notice to the Secretary of State.

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