IRS Unleashes Private Collection Agencies To Chase Tax Debts

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If you have outstanding debt to the IRS, you should know that four private collection agencies have been authorized to chase tax debt on behalf of the IRS. Forbes covers the changes in detail:

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.

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.

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