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IRS Unleashes Private Collection Agencies To Chase Tax Debts

IRS Unleashes Private Collection Agencies To Chase Tax Debts
You may hate being chased by the IRS. But now, four private debt collection firms are getting in on the action too. Congress approved letting the IRS farm out some collections back in 2015. Now the IRS is rolling it out, making private collectors a reality. One key point about private collectors: the IRS will always notify taxpayers first that the debt is being farmed out. That is supposed to help prevent scams.

Taxpayers with overdue taxes will always receive multiple contacts, letters and phone calls, first from the IRS, not from private debt collectors. The IRS will always notify a taxpayer before transferring their account to a private collection agency. First, the IRS will send a letter to the taxpayer and their tax representative informing them that their account is being assigned to a collection agency, and giving the name and contact information for the collection agency. This mailing will include a copy of IRS Publication 4518, What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency.[No one likes scrutiny from IRS]Shutterstock

No one likes scrutiny from IRS

Only four private collection agencies are participating:

CBE Group of Cedar Falls, Iowa;
Conserve of Fairport, N.Y.;
Performant of Livermore, Calif.; and
Pioneer of Horseheads, N.Y.

The taxpayer’s account will only be assigned to one of these agencies, never to all four. No other private group is authorized to represent the IRS. Once the IRS letter is sent, the designated private collector will send its own letter to the taxpayer and their representative confirming the account transfer. To protect the taxpayer’s privacy and security, both the IRS letter and the collection firm’s letter will contain information that will help taxpayers identify the tax amount owed, and assure taxpayers that future collection agency calls they may receive are legitimate.

The private collectors will be able to identify themselves as contractors of the IRS collecting taxes. Employees of these collection agencies must follow the provisions of the Fair Debt Collection Practices Act, and like IRS employees, must be courteous and must respect taxpayer rights. The private firms are authorized to discuss payment options, including setting up payment agreements with taxpayers. But as with cases assigned to IRS employees, any tax payment must be made, either electronically or by check, to the IRS.

A payment should never be sent to the private firm or anyone besides the IRS or the U.S. Treasury. Checks should only be made payable to the United States Treasury. Private firms are not authorized to take enforcement actions against taxpayers. Only IRS employees can take these actions, such as filing a notice of Federal Tax Lien or issuing a levy. To learn more about the new private debt collection program, visit the Private Debt Collection page on IRS.gov.

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