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State: Debt Collection Firm Owes Taxes

DICKSON CITY — The state claims a debt collector in Lackawanna County may owe more than $1.5 million in unpaid sales taxes. The company is Commonwealth Fi...
commonwealth financial

DICKSON CITY — The state claims a debt collector in Lackawanna County may owe more than $1.5 million in unpaid sales taxes.

The company is Commonwealth Financial Systems. The firm works for other companies and banks to collect unpaid debts from consumers.

But the Pennsylvania Department of Revenue says Commonwealth Financial Systems has a huge unpaid debt of its own.

Most of the 75 full-time workers at Commonwealth Financial Systems in Dickson City spend their days on the phone trying to collect debts.

Commonwealth Financial Systems is supposed to pay state sales tax on its commissions from the debts collected.

On Monday in Lackawanna County the state Department of Revenue filed a $2.1 million lien against the assets of Commonwealth Financial Systems.

The state is seeking $1.5 million in what it believes are unpaid sales taxes, another $600,000 in late fees and fines.

“The only thing I can tell you is this morning we turned over the file to our tax accountants. We do not believe there is any additional tax due to the Department of Revenue for Pennsylvania,” said Patricia Cobb, Commonwealth Financial Systems.

The idea of a large collections agency targeted for collection may seem like justice to some.

The Federal Trade Commission reports there are currently 40 complaints against Commonwealth Financial Systems from people all over the U.S.

Last year, a federal judge in Pennsylvania ruled the company broke debt collection rules.

But the company is only talking about the sales tax issue claiming it believes it does not owe the state Department of Revenue any money, and the collection business at Commonwealth Financial Systems continues as usual.

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