In April of 2017, the IRS began using third-party collection agencies to assist in collecting overdue taxes from taxpayers. Here’s what you need to know.
The IRS is currently using four private collection agencies to help collect taxes owed by taxpayers. The program is authorized by the FAST Act, passed by Congress in December 2015, which also authorizes the IRS to revoke and/or deny passports for seriously delinquent taxpayers.
HOW IT WORKS
The accounts being transferred to private collection agencies are relatively few in number and are primarily taxpayers whom the IRS has contacted multiple times in previous years. These taxpayers and their representatives will receive written notice from the IRS stating that their account is being transferred to a private collection agency, followed by an additional letter from the agency confirming the transfer.
If your account is transferred to a private collection agency, you can expect to receive a letter from one of the four following institutions. Note that the collection agencies will never collect payment directly, and you should only ever send payment to the U.S. Treasury or online at IRS.gov/PayYourTaxBill.
- CBE Group- Cedar Falls, Iowa
- ConServe- Fairport, New York
- Performant- Pleasanton, California
- Pioneer- Horseheads, New York
EXCEPTIONS
Under certain circumstances, the IRS will not transfer an account to a private collection agency. These exceptions include:
- Deceased
- Under the age of 18
- In designated combat zones
- Victims of tax-related identity theft
- Currently under examination, litigation, criminal investigation or levy
- Subject to pending or active offers in compromise
- Subject to an installment agreement
- Subject to a right of appeal
- Classified as innocent spouse cases
- In presidentially declared disaster areas and requesting relief from collection
BEWARE OF SCAMMERS
As always, the IRS warns taxpayers to be cautious of scammers pretending to be from the IRS or an IRS contractor. If you owe money to the IRS, you should only submit payment via the IRS website or by mailing a check to the U.S. Treasury. As a reminder, the following tactics are popular among scammers and will never be used by the IRS or their contractors.
- Call to demand immediate payment by way of prepaid debit card, gift card, or wire transfer
- Threaten to arrest the taxpayer for non-payment
- Demand taxes be paid without opportunity for the taxpayer to question the amount owed
- Ask for credit or debit card numbers over the phone
To learn more about the IRS using private collection agencies to collect on delinquent tax debt, click here. If you have a delinquent tax debt and need help resolving it, contact us today.