Tax bills, what are the bad debts that will be cancelled?

The collection reform has generated quite a bit of controversy regarding the news of debt discharge.
In short, from 2025 the tax bills entrusted to the collection agent (Agenzia delle Entrate Riscossione) could be returned to the creditor body if not collected within 5 years.
In turn, the entity to which these credits will be returned will be able to decide whether to entrust them again to the same collection agent, to another or whether to permanently cancel the credit because it is deemed uncollectible.
In this regard, Deputy Ministers Maurizio Leo clarified that it is not a question of canceling all tax bills not collected in the five-year period, but only of a discharge of credits from the collection agent to the taxing body to allow, among other things, this last to remove the sums from the budgets.
There has been a lot of controversy in this regard, however, as it is thought that this is yet another gift towards tax evaders who would find themselves with their debts canceled to the detriment of those who are always up to date with their payments.
read also How to cancel the tax bill after 5 years Discharge of tax bills, a gift to tax evaders? It seems a little premature to attack a decree (the one that will contain the rule in question) that does not yet exist.
We will first need to see what the decree itself will contain before deciding whether it is a fair measure or not.
Although it is true that removing the burden of bad debts from the Revenue Collection Agency also means allowing staff to dedicate themselves to debts that are collectible.
We remember, in fact, that the Agency does not have a staff below its needs and allocating the energies of the latter to collect debts that are difficult to repay is certainly counterproductive.
In any case, the cancellation of the debt should be based not only on the time it took to collect it without success, but also on other factors such as how much time has passed since the debt arose, its amount, the estimate of the possibilities of recovery and the financial situation of the debtor (the latter data could be deduced from the situation of bank current accounts, for example).
Leo, in any case, guaranteed that only the tax bills referring to what are defined as bad debts will be canceled.
What is it about? What are bad debts? It happens that a debtor does not want or is unable to pay off the debts he has contracted.
However, when the debt turns into a tax bill, there is a risk that collection procedures will be activated which involve the use of administrative arrest, mortgage or foreclosure by third parties.
This guarantees the creditor (which is very often the Treasury) to recover the sums it is owed.
In some cases, however, debts are considered uncollectible, that is, highly unlikely to be collected by the creditor.
A credit becomes uncollectible when the collection activity has not given the desired results, the debtor is unable to pay it, the debtor is untraceable (or deceased) or, alternatively, has declared bankruptcy.
If the collection agent can't mortgage or seize anything, how do you get the debt paid? If the debtor is penniless, how can one hope to regain possession of the sums of which one is a creditor? And again, if the debtor is deceased, who will be expected to pay the debt? In all these cases the debt is considered uncollectible and these are precisely the cases for which we want to provide for the automatic cancellation of tax bills.
Continuing to claim a credit, in fact, for the creditor body only means keeping those sums (which it will not recover) in its budget.
Currently, debts considered uncollectible are cancelled, periodically, with the cancellation of tax bills which usually occurs on older debts and with amounts that are not too high (the last cancellation concerned debts that were at least 8 years old and with amounts that did not exceed 1,000 euros).
Providing an automatic discharge for these debts, therefore, would eliminate the need to periodically provide for the "settlement and write-off" (which ultimately does the same thing, cancels the debt).
read also Tax bills, how to check your debt situation on the Revenue Agency website