IRS ridding themselves of private debt collectors

fairtaxbook IRS is getting rid of private debt collectors which had access to records pertaining to your tax debt.

The justification for the private debt collectors in the first place had always been that private industry can work more efficiently than government. That’s usually true in most cases. However, in this instance, the office of the National Taxpayer Advocate reports that the third party bill collectors actually cost more in expense than they were able to collect.

The IRS will, of course, now have to hire more collectors of their own to go after those people who haven’t paid their back taxes. And that would be an increase in government and an increase in taxes on your hard earned paycheck.

If you owe money to the IRS and can’t pay, it’s tempting to not file. You probably figure, “Well, I can’t pay, so does it really matter whether or not I file?”

Yes, it does. The IRS has 2 penalties — failure to file and failure to pay. The former is a heavy-duty one, while the latter brings with it a lower rate of interest than your typical credit card.

Make sure you file on time even if you don’t have any money to pay. The IRS actually has an offer in compromise program where you can pay as you go if you’re financially stretched.

Are you a small business owner who is having trouble staying open? There’s always that temptation to not send the withholding you keep out of your employees’ checks and use it to keep your doors open. But this is never a smart move. Just file on time and get on a repayment plan.

But, I have a solution for this pain in the ass problem called the IRS. What is it?

It is called the Fair Tax Act. What is the Fair Tax? The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including a progressive national retail sales tax, a prebate to ensure no American pays federal taxes on spending up to the poverty level, dollar-for-dollar federal revenue neutrality, and, through companion legislation, the repeal of the 16th Amendment.

* Enables workers to keep their entire paychecks
* Enables retirees to keep their entire pensions
* Refunds in advance the tax on purchases of basic necessities
* Allows American products to compete fairly
* Brings transparency and accountability to tax policy
* Ensures Social Security and Medicare funding
* Closes all loopholes and brings fairness to taxation
* Abolishes the IRS

Bill Archer, former head of House Ways and Means Committee did a survey on the fair tax. The survey was conducted among 500 European companies. One simple question was asked, ” What would you do if the U.S. installed the FairTax.” The responses where astounding. Four hundred said they would build their next plant here. The remaining one hundred said they would move their corporate headquarters here. My guess is that this would be just the tip of the iceberg as to what would follow. Our current tax code does the exact opposite. Product labels would contain the same foreign corporate names but the labels would also contain ” MADE IN THE U.S.A.”

For more info on the Fair Tax. Link.

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