Recently, the IRS has unleashed four private debt collection agencies to farm out tax debts. In 2015, under Section 32102 of the Fixing America’s Surface Transportation Act (FAST Act), Congress authorized the outsourcing of tax collections by the IRS to 4 private agencies. Now the IRS has recently begun to take action, making private collection agencies a reality.
The new scheme enables these designated agencies to collect unpaid tax debts, on behalf of the government. Usually, these tax debts are not currently being worked by the IRS and have been assessed by the tax agency several years ago.
One key point to note about this private collection of taxes is that the IRS will always contact the assigned taxpayers by first sending notifications to them that such tax debts are being farmed out. This in turn wipes away the gray line between a real private collection agency and a scammer. Taxpayers being assigned to a private collection agency would have received multiple contacts from the IRS in previous years and still have an unpaid tax bills to settle.
Taxpayers Get Assigned to IRS Private Collection Agencies Taxpayer with the following criteria:
- Overdue tax accounts.
- The IRS hasn’t contacted the taxpayer in a year and the taxpayer isn’t requesting a payment alternative or relief.
- More than one-third of the 10-year collection statue period has expired
- No IRS employee has been assigned to collect the debt .
There are only 4 participating private collection agencies officially assigned by IRS, and they are the following:
- CBE Group of Cedar Falls, Iowa.
- Conserve of Fairport, New York.
- Performant of Livermore, California.
- Pioneer of Horseheads, New York.
Only one of these private collection agencies will be assigned to your tax account, and not all of them. At the moment, these are the only private agencies that you should be expecting to contact you once a letter from the IRS is sent to you informing of your tax debt. Consequently, any of the four agencies specifically assigned by the IRS will be sending you a letter.
In conclusion, the IRS will send a letter to the taxpayer and their tax representative to inform them that the tax account is being assigned to a collection agency, with the name and contact information of the collection agency and the amount that is owed. This way, private collectors will be able to identify themselves as contractors of the IRS’s private collection agencies and you will be able to identify which agency to contact with regards to tax collection. The letter will include a copy of IRS Publication 4518, What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency.