Collections Company Coming After Me for Back Taxes

I got a very stressful call yesterday from DCS - Diversified Collections Services. The caller said that I owed $11,0333 dollars in back taxes to Virginia and unless I paid it within the next 2 days they would start the process to garnish my wages.

This person called me at work right before 5pm. At first I was laughing because I thought it was a joke, but it suddenly got very seriously for me when the told me my SSN and that they had been trying to contact me for the past several years. I am sure these are the typical collection agent tactics but they did everything they good to make me panic and ask what I could do to prevent this.

The first think I did was ask why I hadn't heard of this before. The response was they had been trying to contact me for the past several years. They had sent regular mailings to me and none were returned so I should be aware of the amount in collections. I assured the person I had never heard of this prior to the phone call, but it didn't really get me anywhere.

I then assured them this was a mistake that I had been living, working, and paying taxes in North Carolina since 2001 so this was some sort of mistake. I asked for some documentation that would explain what the $11,033 was for so I could clear it up and she said it would take several weeks to provide that information to me - not before the deadline for the meeting they were having to start the garnishment of my wages. She only offered to me that I could fax my 2003 Federal and NC state income taxes to the collection company within the next 24 hours to see if that would help.

Then I started to think about if this was legitimate. I asked for proof that they were who they said they were - she assured me she was, but she couldn't provide me with a contact person from the VA government. I would have to find that out on my own.

Needless to say my mind was racing through the night as I tried to understand what this meant. I scoured the Internet and learned a lot about debt collection. It turns out a lot of people who have never lived in VA have had this same experience.

I did find this site that had a sample letter I could send the collections company to dispute the debt and give me 30 days to figure out what was going on.

This morning I called the VA Dept of Taxation Collections dept as soon as they opened. I was connected to a much friendly person that did confirm for me that they believed I owed them back taxes for YR2003 and it was likely because of some information from my federal tax return. This person recommended I send them my federal and state income tax returns for YR2003 and that would suspend the collections process and followup in a couple days to see if everything got straightened out. I felt a lot better while talking to the Dept of Taxation in VA - and quickly forgot about chewing them out for making this bogus claim to begin with.

I went ahead and faxed my income tax returns to the VA Dept of Taxation. Hopefully that will be enough to straighten out this mess.

Related in Income Taxes:

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Acknowledgement of Response from VA Dept of Taxation (Mar 30, 2011) In January I finally got a response from the Commonwealth of Virginia Department of Taxation. Back in March of 2009 I had received a phone call out of the blue from Diversified Collections Services (a collections agency) indicating I owed...

Free Copy of TurboTax Basic (Nov 23, 2010) Intuit is offering a free download of TurboTax Basic (Federal Only) for Mac or Windows. I have found that the basic version allows you to cover all of your Federal income tax return needs, it just lacks the extra...

Comments (16)


Scamboogerie!

The real scary part is that they evidently know your social.

I've been getting phone calls every two weeks from a debt collection service who is calling to try and clear up some unpaid debt that they think I have.

All I have to do is verify my entire social security number...

Right.

My position is that if I do actually have some unpaid debt, put it in writing and mail it to me. Then I'll take it up personally with whatever company I seemingly owe money to.

-Grant
TheCornerOfficeBlog.com

They have been hounding me for years about a supposed tax bill, last time I looked it was around $3k.

I lived in NC and commuted to DC for about 6 months before I moved to VA. VA decided that because I moved there eventually, I was responsible for state incomes taxes for the 6 months I didn't live in the state.

Good luck!

Clark Howard's website has a lot of information about dealing with debt collectors. They can't garnish your wages in two days.
http://clarkhoward.com/liveweb/shownotes/2008/07/07/13747/

Would back taxes show up on a credit report? I always check my free reports and this would send a flag, but who knows if taxes even show up there?

Wow, good luck!

Yipes! What a disaster. So despite the appearance that this was a scam, it was in fact a legitimate problem. I hope it is *their* problem and not yours!

Is this a matter for your attorney?

This sucks. I had a similar experience where a law firm contacted me in writing trying to collect a 7year old car excise tax bill plus interest. They got my name and SS# from the city and used my credit report to find me. The city got a default judgment against me but never contacted me. Fortunately I sent the plates back via certfied mail and had the 7 year old receipt. I sent the law firm a certified letter and never heard from them again.

It is very important that you keep accurate records and send certified mail in this process so that if you ever have to prove something you can. I would start by sending a certified letter to the State of VA tax dispute office documenting your conversation on the phone and your response (FAX'ing 2003 returns). The folks you deal with will take you a lot more seriously when they see you are keeping good records. You will likely get the benefit of the doubt from a judge or arbitrator if it ever comes to that. Also any letter should request that all contact be in writing. If you talk to anyone on the phone get the name before you start talking and record the time and date.

Also you should contact your employers payrool dept and tell them you think a scammer may be trying to garnish your pay. Request that they contact you if anyone outside the company tries to affect your payroll. Do it in writing although email is fine as long as you have a copy on a non-work machine. Also request any response be in writing.

a few of my family members and my wife have run into this with various states where they may have owned a vehicle or lived for 2 months or something else bogus... and most of the time, once you provide documentation to the state tax collectors these issues disappear...

but the letters CAN BE VERY scary and the phone calls down right annoying.

Nothing was on my credit report as of December 2008.

did you even check out this so called debt collection agency to see if they're legit? It's very possible it's just scammers who somehow got a hold of your SS and want to get the rest of your highly personal info, like your birthdate, etc, so they can commit ID theft.

Calling the state directly was the right thing to do and it appears it is a legit matter. But be very, very careful about handing over any tax returns when you get a phone call out of the blue by someone you don't even know.

giving you 48 hours to pay a bill you know nothing about is not a professional way to conduct business, regardless of wht they say of trying to contact you for several years.

Be very cautious and very aware that they *can* take your entire paycheck. This was done to my boyfriend last December (2008) and it's the only case in the U.S. where you are guilty until you prove yourself innocent.

This was for taxes supposedly due back in 1991 - the IRS doesn't have records now, we don't have records and, conveniently, the state of VA doesn't. Or at least they led us to believe that at first.

I'm in the process of working with my local congressman, a state representative and a senator. If there are more that read this and live in the state of Washington now, please feel free to contact me!

This is almost certainly a scam. If you're concerned, contact VA government and ask them to verify that they've started collections against you.

Until you get a 'yes' from them, sleep soundly at night. There are just to many things about this that scream 'scam' to me for me to worry about it.

Oh wow. I feel so bad for you. I live in VA and can't believe how a mistake like this happens. I hope it gets resolved.

I had the EXACT same experience. Looks like VA is very lax in determining who owes them taxes.

I ended up mailing my tax returns from another state to VA Tax Dept and they in turn contacted the collections agency to remove me from their list. It's BS. But what can you do? Nothing. Since my amount was around 1K, I considered just paying it to get them off my back thinking it would be a painful and time intensive process to work everything out otherwise. My guess is that other people may feel the same way and just pay it.

They also told me they've been trying to track me down for years. I asked them why didn't they just google my name? My homepage lists my address and correct contact info and always has. Clearly, it's some underhanded scheme on the part of VA.

Same thing with me today. $13K for taxes in Va from 1994. BCS the collection agency. I was barely even making much more than that in 1994. Calling VA tomorrow. Who keeps 16 year old tax records?

I'm so glad I'm not the only one! VA contacted me a couple of years ago looking for thousands of dollars for 1993 and 1995.

I lived there those years and filed both years, but they had no record of it. I even got refunds those years! I happened to have a copy of the 93 return but had to re-do the 95 return. They accepted the returns and told me case closed.

Then a year later I get a letter that I had a plan distribution in 1995 and had to provide proof that it was a rollover. Again, lucked out and had that form (14 years later), so I faxed it. Another year later, I get yet ANOTHER letter that they are willing to reduce the $8k I owe them to $5k if I pay within 30 days.

Still trying to get to the bottom of it and get rid of it! 17 years later for a year I got a refund!

I am filing bankruptcy soon and if I can't get rid of this I am going to try and include it. It meets the criteria for discharging tax debts. Hang in there and be diligent or it will mess you up! Good luck!

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