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.
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.
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.”
Good luck and happy investing,
Uncommon Wisdom Daily