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PRIVATE DEBT COLLECTION AGENCIES HIRED BY THE IRS

5/8/2017

The Internal Revenue Service has begun a new private collection program of certain overdue federal tax debts. The new program, authorized under a federal law enacted by Congress in December 2015, enables these private contractors to collect, on the government’s behalf, outstanding inactive tax receivables.

As a condition of receiving a contract, these private collection agencies must respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act.

These private collection agencies will work on accounts where taxpayers owe money, but the IRS is no longer actively working them. Several factors contribute to the IRS assigning these accounts to private collection agencies, including older, overdue tax accounts or lack of resources preventing the IRS from working the cases.

Private collection agencies will be able to identify themselves as contractors of the IRS collecting taxes. Employees of these collection agencies must follow provisions of the Fair Debt Collection Practices Act and should be courteous and respect taxpayer rights.

In light of continual phone scams where callers impersonate IRS agents and request immediate payment, taxpayers should be extremely cautious if contacted by one of these private collection agencies. The IRS will give taxpayers and their representative written notice that the accounts are being transferred to the private collection agencies. The agencies will send a second, separate letter to the taxpayer and their representative confirming this transfer. Do not speak with someone claiming to be from a private collection agency unless you have received those two letters.

Private collection agencies will not ask for payment on a prepaid debit, iTunes or gift card. Taxpayers will be informed about electronic payment options for taxpayers on IRS.gov/Pay Your Tax Bill. Payment by check should be to the U.S. Treasury and sent directly to IRS, not the private collection agency.

The IRS has selected the following four private collection agencies -

CBE - Waterloo, IA
ConServe - Fairport, NY
Performant - Pleasanton, CA
Pioneer - Horseheads, NY

If you do not wish to work with the assigned private collection agency to settle your overdue tax account, you must submit a request in writing to the private collection agency.

IRS will not assign accounts to private collection agencies involving taxpayers who are:

Deceased
Under the age of 18
In designated combat zones
Victims of tax-related identity theft
Currently under examination, litigation, criminal investigation or levy
Subject to pending or active offers in compromise
Subject to an installment agreement
Subject to a right of appeal
Classified as innocent spouse cases
In presidentially declared disaster areas and requesting relief from collection

Private collection agencies will return accounts to the IRS if taxpayers and their accounts fall into any of these 10 situations after assignment to the private collection agencies.

Taxpayers continue to have the right to be represented if collection action is initiated by one of these private collection agencies. Nancy Turner Egbert, an Enrolled Agent with unlimited rights to represent taxpayers before the IRS, will be happy to help you. Please contact her at 530626-8551 or turnerstaxservice56@gmail.com

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HOUSE PASSES REPEAL AND REPLACE LEGISLATION

5/6/2017

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After a dramatic 217-213 House vote to repeal and replace the Affordable Care Act (ACA), the question many are waking up to is, "What does this all mean?" In short, it means these ACA repeal efforts live for another day by moving over to the U.S. Senate. Senate Republicans will now have to maneuver between its conservative members and moderates without the losing three votes necessary to get them to a majority.

While the House bill as passed is unlikely to become law, it is important to understand what is in it for the process going forward.

First, and foremost, it repeals the individual mandate of the ACA.

Second, it repeals the taxes that paid for the subsidies and Medicaid expansion of the ACA--- the biggest of those is the 3.8 percent tax that applied to capital gains, dividend, and interest income for families with $250,000 or more in income ($125,000 for singles). The Joint Committee on Taxation estimates that getting rid of this tax costs $157.6 billion over 10 years.

Third, the House bill would provide an option for states to waive out of the "essential health benefits" of the ACA, such as prenatal care, preventative care and mental health coverage.

Fourth, the bill would allow states to drop the requirement that insurers charge everyone the same price regardless of their health history, or pre-existing conditions. It provides some funding for states that establish high-risk pools.

Fifth, it would phase out the Medicaid expansion of the ACA that covered adults making up to 133 percent of the federal poverty level. It would also change how the federal government would reimburse states for Medicaid expenses by turning the money into a "block grant," or a lump sum rather than a per-person payment for each Medicaid patient. This payment method would still cut the program further over time.

Sixth, the House bill would provide a tax credit for people buying insurance on their own based on their age rather than their income, phasing it out for individuals making more than $75,000 or families making more than $150,000.

Senate GOP leadership has indicated that they will not be forced into any deadlines, but will take their time and have the proper scoring by the Congressional Budget Office before moving a bill. To further these ACA repeal and replace efforts, Senate Majority Leader Mitch McConnell (R-KY) has created a working group made up of leadership from committees of jurisdiction and the various wings of the GOP in the Senate. They are likely to cobble together a bill allowing the Senate to reach 50 votes plus Vice President Mike Pence. After that, the two chambers will go about the business of reconciling the two bills.

Information provided by the National Association of Enrolled Agents

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CALIFORNIA GAS TAX & VEHICLE REGISTRATION FEES INCREASING

5/6/2017

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Governor Jerry Brown has signed legislation increasing the gasoline and diesel fuel taxes and vehicle registration fees. Here are the details:

● $0.12 per gallon increase in the gasoline tax, effective 11/1/2017
● $0.20 per gallon increase in the diesel fuel tax, effective 11/1/2017
● Increase in the vehicle registration fee as follows, effective 1/1/2018:
   ¨ $25 for vehicles valued at less than $5,000
   ¨ $50 for vehicles valued between $5,000 and $24,999
   ¨ $100 for vehicles valued between $25,000 and $34,999
   ¨ $150 for vehicles valued between $35,000 and $59,999
   ¨ $175 for vehicles valued at $60,000 or more
● $100 new vehicle registration fee for 2020 and later models of zero-emission vehicles, effective 7/1/2020

Information courtesy of David Fogel, CPA

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Federal and state tax laws and regulations change regularly. As we become aware of changes, we will post them here and, if you are a client who has provided us with an email address, we will also email them to you.

PRIVATE DEBT COLLECTION AGENCIES HIRED BY THE IRS

HOUSE PASSES REPEAL AND REPLACE LEGISLATION

CALIFORNIA GAS TAX & VEHICLE REGISTRATION FEES INCREASING

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