No U.S. Private Debt Collectors for Americans Overseas: IRS

For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

By Alison Bennett

Americans living overseas don’t have to worry that U.S.-based private debt collectors will be trying to find them under an IRS program, the agency told Bloomberg BNA late May 10.

“The companies participating in the private debt collection program are only licensed to operate in U.S. states and territories,” the Internal Revenue Service said in a statement. “As a result, the IRS is excluding taxpayers who live outside the U.S. from the private debt collection effort.”

The news brought immediate praise from American Citizens Abroad. The group had asked for an exemption from the program in a May 5 letter to IRS Commissioner John Koskinen. The letter cited concerns that American taxpayers living overseas don’t have adequate information about how the program—created in 2015 under the Fixing America’s Surface Transportation Act (Pub. L. No. 114-94)—would work.

Marylouise Serrato, executive director of American Citizens Abroad, called the IRS’s decision “fantastic news” in an interview late May 10.

Even for U.S. citizens who didn’t know about the program, “it takes away one more complication for them. I think most Americans would be relieved” that they won’t be confronted by private debt collectors, Serrato said.

Serrato previously told Bloomberg BNA that people abroad often have difficulties getting mail, and might miss deadlines. Another concern was that U.S.-based collection agencies working in other countries might not be held to the requirements of the Fair Debt Collection Practices Act, she said.

The IRS said in its statement that it will continue to review the letter. The agency also cautioned American taxpayers living abroad to be alert to telephone scammers posing as debt collectors.

In the May 10 interview, Serrato said this type of scam—fraudulent calls by people pretending to be from the IRS—has been an ongoing concern for taxpayers living overseas.

An IRS spokesperson stressed May 10 that to ensure they qualify for the exclusion, taxpayers must make sure the agency has their correct foreign address.

To contact the reporter on this story: Alison Bennett in Washington at abennett@bna.com

To contact the editor responsible for this story: Meg Shreve at mshreve@bna.com

For More Information

Text of ACA's letter is at https://www.americansabroad.org/files/532/.

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Daily Tax Report