The IRS recently announced that, beginning this month, the tax agency will be assigning certain unpaid tax accounts to private collection agencies. The IRS will retain and continue to collect most unpaid taxes. The IRS has identified certain tax accounts, however, that it will assign over to these newly-designed private collection firms for collection. The accounts to be assigned to the private collection firms involve taxpayers who have not paid their taxes for many years and who should be well-aware of their unpaid taxes.
The private collection firms will be authorized to contact taxpayers, request that the taxes be paid, and to also receive financial information from taxpayers and to set up payment plans. These private collection firms, however, do not have the authority to file tax liens, and cannot garish wages or otherwise seize or levy a taxpayer’s assets to pay taxes – only the IRS has this authority.
The process will begin with the IRS sending an initial letter to taxpayers notifying them that their unpaid tax account has been assigned to a private collection agency, and identifying this agency. Taxpayers who receive these written notices will have had a known tax debt for many years and will have been contacted by the IRS previously concerning payment of their taxes.
With the initiation of this new program, the IRS is warning taxpayers to be wary of scammers claiming to participate in this program. Taxpayers should know that the designated private collection agencies are limited to four specific firms: CBE Group of Cedar Falls, Iowa; Conserve of Fairpoint, NY; Performant of Livermore, CA; and Pioneer of Horseheads, NY.
The IRS’s use now of private collection firms comes at an unfortunate time where many scammers, falsely claiming to be the IRS, have contacted taxpayers to fraudulently receive payments. While these scammers use many tactics, the IRS and its new private tax collection firms will never do many things that these scammers do. The IRS and its private collection firms will never demand payment over the phone through credit card or wire transfer; will never threaten arrest or jail unless taxes are paid; and the IRS and its private collection agencies will not demand that taxes be paid without giving the taxpayer an opportunity to question or appeal the amount “owed”. Legitimate tax payment requests will also always be communicated first through mail, whether from the IRS or one of the four designated private collection agencies.
Hopefully, the notification letters to be sent out by the IRS under the new private debt collection program will provide some level of protection against scammers. These notification letters will identify which of the four specific tax collection agencies the taxpayer’s account has been assigned. If the taxpayer then receives a notice or call from the assigned tax collection agency, this should give a taxpayer assurance that the contact is legitimate. Random, threatening calls from someone claiming to represent the IRS and attempting to collect a tax debt should be ignored.
[author: Dustin Scott, Tax Accountant]
The IRS recently announced that, beginning this month, the tax agency will be assigning certain unpaid tax accounts to private collection agencies. The IRS will retain and continue to collect most unpaid taxes. The IRS has identified certain tax accounts, however, that it will assign over to these newly-designed private collection firms for collection. The accounts to be assigned to the private collection firms involve taxpayers who have not paid their taxes for many years and who should be well-aware of their unpaid taxes.
The private collection firms will be authorized to contact taxpayers, request that the taxes be paid, and to also receive financial information from taxpayers and to set up payment plans. These private collection firms, however, do not have the authority to file tax liens, and cannot garish wages or otherwise seize or levy a taxpayer’s assets to pay taxes – only the IRS has this authority.
The process will begin with the IRS sending an initial letter to taxpayers notifying them that their unpaid tax account has been assigned to a private collection agency, and identifying this agency. Taxpayers who receive these written notices will have had a known tax debt for many years and will have been contacted by the IRS previously concerning payment of their taxes.
With the initiation of this new program, the IRS is warning taxpayers to be wary of scammers claiming to participate in this program. Taxpayers should know that the designated private collection agencies are limited to four specific firms: CBE Group of Cedar Falls, Iowa; Conserve of Fairpoint, NY; Performant of Livermore, CA; and Pioneer of Horseheads, NY.
The IRS’s use now of private collection firms comes at an unfortunate time where many scammers, falsely claiming to be the IRS, have contacted taxpayers to fraudulently receive payments. While these scammers use many tactics, the IRS and its new private tax collection firms will never do many things that these scammers do. The IRS and its private collection firms will never demand payment over the phone through credit card or wire transfer; will never threaten arrest or jail unless taxes are paid; and the IRS and its private collection agencies will not demand that taxes be paid without giving the taxpayer an opportunity to question or appeal the amount “owed”. Legitimate tax payment requests will also always be communicated first through mail, whether from the IRS or one of the four designated private collection agencies.
Hopefully, the notification letters to be sent out by the IRS under the new private debt collection program will provide some level of protection against scammers. These notification letters will identify which of the four specific tax collection agencies the taxpayer’s account has been assigned. If the taxpayer then receives a notice or call from the assigned tax collection agency, this should give a taxpayer assurance that the contact is legitimate. Random, threatening calls from someone claiming to represent the IRS and attempting to collect a tax debt should be ignored.
