The IRS Just Hired Bounty Hunters to Collect Your Taxes

Ask anyone who has ever owed the Treasury Department a past-due tax bill, and they will confirm to that when it comes to getting their money, the Internal Revenue Service plays hardball.

In fact, the IRS has garnered the reputation as one of the most-feared government agencies, as they can garnish your wages, take possession of your bank account and seize all your assets in order to collect a delinquent tax bill.

Yet interestingly, the IRS recently announced that it was employing another tactic in its attempt to collect what’s owed to the Treasury.

That tactic is the use of private, debt collections agencies.

The use of these debt-collecting “bounty hunters” as they are sometimes called, will involve four debt collection agencies.

Their job will be to go after outstanding payments from taxpayers who’ve already been contacted by the IRS numerous times, but yet still haven’t made good on their bills.

I thought this subject particularly poignant right now, especially considering this year’s official tax filing deadline is tomorrow, Tuesday, April 18.

So, if you still haven’t filed, and if you are going to owe a lot of money and can’t pay, will you soon be hearing from debt-collection bounty hunters?

The short answer, at least initially, is “no.”

The way the IRS explains it, taxpayers with overdue tax bills will always receive several collection notices from the IRS through the mail before their accounts are turned over to the private collection agencies.

These agencies are then supposed to send their own letters letting the taxpayer know that their account has been transferred to them.

To me, this sounds like a potential fraudulent bomb just waiting to explode.

The IRS kind of knows that too, and they even sent out a statement addressing just that. Here’s the money quote from IRS Commissioner John Koskinen (yes, the same man who testified in front of Congress regarding the agency’s targeting of conservative groups right before the 2012 election):

“The IRS is taking steps throughout this effort to ensure that the private collection firms work responsibly and respect taxpayer rights. The IRS also urges taxpayers to be on the lookout for scammers who might use this program as a cover to trick people.”

Forgive me if I choose to remain a bit guarded about this whole thing, and especially over the possibility of the public getting scammed. When even the IRS Commissioner says be on the lookout for fraud, well, I’m not too confident.

Still, the IRS says that the collection agencies must follow the Fair Debt Collection Practices Act, which are rules that outline when a bill collector can call you, and what they can and cannot say.

Now, when I first heard about the IRS’ decision to use private collection agencies, my first thought was why the IRS would decide to do this. I mean, it seems at odds with how they’ve done things in the past.

Yet according to a story at CNBC.com:

The IRS did not decide to do this on its own. Congress required the agency to use private-sector debt collectors as a way to help fund road improvement projects, when it passed the Fixing America’s Surface Transportation Act in 2015.

Well, there you have it. One government program from a couple of years ago now has compelled the IRS to send out tax collection bounty hunters.

Reminds me of a saying I once heard, “The bigger the government, the smaller the citizen.”

To be fair, the CNBC article does say that some IRS employees are opposed to private debt collection.

Tony Reardon, president of the National Treasury Employees Union, said in a statement that he expects the result will be “collection agents getting paid to harass taxpayers, many of whom need assistance, not threats.”

The moral of the story here is that you should probably always:

A) File your taxes on time.

B) Pay what you owe on time.

C) If you can’t pay all of what you owe, be proactive in setting up a payment plan with the agency.

The IRS likes when you’re proactive and willing to pay at least something.

If you don’t take the aforementioned steps, and if you ignore the repeated attempts to pay what you owe, then you can look forward to a whole lot of contact from professional debt collectors.

I don’t know about you, but I don’t want IRS collectors or private debt bounty hunters calling me. So, best to just avoid the whole experience altogether.

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Mining for Money

A Yen for Gold
By Sean Brodrick

Gold is on the move again, testing its big downtrend. It looks poised to break out to the upside — though it may have to pull back before making its final hammer blow. The good news is there’s more than one way to play this move.

One I really like is the Japanese yen.

Recently, the Japanese yen is closely correlated to gold. Sure, this relationship can change over time. Just like the U.S. dollar.

As I’ve told you, the dollar usually sits on the opposite end of the “See-Saw of Pain” with gold. When one goes up, the other goes down. As for the yen — it sure looks like the yen is holding hands with gold recently. Look at this chart.

Permalink

You can see that the yen bottomed on December 12. Since then, it’s up about 8.9%. Gold bottomed a bit later in December, but it has still managed to rally 10.5%.

And that’s the profit potential I am talking about. With the yen shadowing the dollar so closely, one way you could play this move is by going long the yen.

Both gold and the yen tend to move opposite the U.S. dollar. And as I told you on April 3, the U.S. dollar is trending lower. That downtrend remains in place for the greenback. And that’s mainly because President Trump’s economic, healthcare and tax initiatives are getting bogged down in Washington’s swamp.

And it doesn’t help that the Empire State Manufacturing Index totally whiffed when it reported its April number. It tumbled to 5.2, when the street was expecting a reading over 15. Ouch!

That kind of stinky egg probably takes a May rate hike off the table. And a June hike looks less likely, too. That news sends the dollar reeling lower. On the other end of the seesaw, gold and the yen go higher.

But the dollar’s seesaw with gold isn’t the only driver. Another force is that gold and the yen are “safe havens.” When people are worried, they put money in safety.

Why are people worried? Because they consider President Trump unpredictable, especially when it comes to foreign policy. If you think North Korea’s failed launch of a ballistic missile this weekend was the end of that crisis, think again.

Washington insiders say Trump is willing to consider “kinetic” military action on North Korea. That includes a sudden military strike. On a country with nuclear weapons.

So are investors worried? Darned tootin’ they are.

We can all hope this game of brinksmanship ends on a positive note. But until it does, expect an underlying bid for both gold and the yen.

Could this be enough to push gold up through that big downtrend I told you about last week in “This Gold Party Ain’t Started Yet“?

Let’s just say the odds are better than average.

I’ve told you plenty of ways to play gold. How about the yen?

Well, you can always use the CurrencyShares Japanese Yen ETF (NYSE: FXY). It has plenty of liquidity and lets you play the yen rally cheaply.

Or, for more oomph, you can check out JR Crooks’ Currency Options Alert. Learn more about that publication HERE.

JR recently guided his subscribers to a 54% gain on Treasuries. On Treasuries? Dang! He grabbed that kind of gain on something so dull it can make drying paint look interesting? I wonder what that guy can do with a currency like the yen.

I guess I’ll find out. And maybe you will, too.

Bottom line: Gold is going higher. There are many ways to play this move. Whatever you do, prepare yourself for when this profit party train rolls out of the station. You don’t want to be left on the platform, holding the bag on a bunch of “coulda, woulda, shoulda’s.”


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I want to know what you think, so if you have a comment or question about today’s Afternoon Edition topic, or any of the topics we cover, just leave me a comment on our website or send me an e-mail.

Good luck and happy investing,

Brad Hoppmann
Publisher
Uncommon Wisdom Daily

Your thoughts on “The IRS Just Hired Bounty Hunters to Collect Your Taxes”

  1. I don’t understand your alarm over using 3rd party vendors for collection purposes. This is a common practice in all industries. Typically utilizing 3rd party collection vendors is a better economic decision then hiring, training, technology investment required for collection activities. It’s about time the IRS joined in – if you don’t pay your bills regardless of who you owe you should be subject to additional measures for collection. Fraud is a concern in our daily environment you should always verify information and never send payment until you verify.

  2. Thanks for including the article by Sean Brodrick. Over the years I’ve found him to be very knowledgeable, so I always sit up and read thoroughly any article of his.

  3. Let me start with a positive statement about the IRS: I never had a problem with them and I appreciate how easy a number of things are.
    Their communication may not be easy to understand but so far it all worked out. What I like much better is the way it works in my home country: They send me 2 sets of the forms I may need. I fill in as much as I can (usually I bought a book or programme to guide me) and if I get stuck I take the stuff to the local office of the “IRS”. They have the obligation to help and inform me about all I am entitled to. That usually took me about half an hour and it was done. Bill or refund would come a few weeks later.
    I do not like the idea of “bounty hunters”. The official agency should not give up any of their authority. Congress is corrupt by pushing for private companies to “make” money. The money is not “made”, it is skimmed from the tax payer. This also shed a light on the poor morals in this country. In the early stages of the US independency lots of scammers and thieves and con men raided the country in the absence of laws. This mind set combined with aggressiveness and lust for money poisoned the country to this day.
    In my view the US law enforcement has many flaws from too aggressive to too lenient. That is not helped by laws that have been written sloppily or even intentional loop holes. That situation as a whole promotes the Mediterranean motto: “Taxes have to be evaded at any cost”.
    Countries with a social conscience have a problem with very few tax evaders. Those evaders are usually crooked and overly greedy business people who do not see how much good their government does with the taxes.
    Btw, I agree with the rich New Yorkers who recently asked for higher taxes. Taxes in the US are too low in general (like fuel tax) though punishing in certain areas (like real estate tax).

  4. Brad,
    I agree with much of what you say, but I can’t let that favorite conservative claim pass without a reply- the one about Obama’s IRS “targeting conservative groups.”

    In the timeframe you mention, many entities were set up under the guise of tax-exempt “charitable organizations,” whose true purpose was to funnel large amounts of money into promoting political candidates, a taxable activity.

    The IRS is required to examine any new organization’s claim for tax-exempt status. And when something looks fishy, they’re expected to request a lot more detail. This may result in denial of a group’s claim for tax exemption.

    They quickly found that most groups with pseudo-patriotic names like “Americans for Liberty and Future Prosperity” were probably not charities, and deserved a closer look. Names like that became a red flag.

    They challenged dozens of conservative groups, and also some Democratic groups. And let’s face it, there’s a lot more dark money and financial trickery on the conservative side. I repeat: Democratic organizations were also examined. And they should have pointed that out. But that didn’t play into the frenzied media narrative about “attacks on conservatives,” so that detail got ignored.

    Since these “charitable groups” are all interconnected, many run by the same operatives, they quickly saw a chance to play victim and smear Obama. This was too juicy to pass up during an election year (2012).

    They went to their Fox and Limbaugh megaphones to trumpet the story that “The IRS is ‘Targeting’ Conservative Groups,” implying to their faithful listeners that this was an IRS attempt to shut down actual groups (as in organizations with dues-paying members), rather than to question the tax-exempt status of money-handling operations claiming to be charities.

    The IRS, being vilified in the media and the conservative Congress, bent over backwards to treat the claim as legitimate. Instead of simply explaining the above facts, they cowered and went on the defensive. The IRS did nothing wrong. And that’s where they screwed up, thus allowing the smear to pass for fact.

    Even today, our own Brad Hoppmann seems to believe this yarn.

    We want Uncommon Wisdom readers to be well-informed. And this is something worth knowing.

  5. People need to pay the taxes they owe. You do, I do, so should everyone. The worst offenders are the ones with the greatest means.

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