Private Collection of Some Overdue Taxes

From the Desk of Lauran L. Stevenson

Private Collection of Some Overdue Taxes

Starting this month, the IRS will begin sending letters to a select group of taxpayers whose overdue federal tax accounts are being assigned to one of four private-sector collection agencies.

This is a new program that was authorized under a federal law enacted by Congress in December 2015 which enables these designated contractors to collect, on the government’s behalf, unpaid tax debts. Taxpayers being assigned to a private collection agency would have had multiple contacts from the IRS in previous years and still have an unpaid tax bill.

John Koskinen, the IRS Commissioner stated, “The IRS is taking steps throughout this effort to ensure that the private collection firms work responsibly and respect taxpayer rights. The IRS also urges taxpayers to be on the lookout for scammers who might use this program as a cover to trick people. In reality, those taxpayers whose accounts are assigned as part of the private collection effort know they have a tax debt.”

How Does the New Program Work?

The IRS will always notify a taxpayer before transferring their account to a private collection agency (PCA). First, the IRS will send a letter to the taxpayer and their tax representative informing them that their account is being assigned to a PCA and giving the name and contact information for the PCA.

Only four private collection agencies are participating in this program: CBE Group of Cedar Falls, IA; Conserve of Fairport, NY; Performant of Livermore, CA; and Pioneer of Horseheads, NY. The taxpayer’s account will only be assigned to one of these agencies, never to all four. No other private collection agencies are authorized to represent the IRS.

Once the IRS letter is sent, the designated PCA 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 PCA’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.