After warning tax payers that the IRS will never call you to collect a tax debt, the IRS has began handing over some of it’s debt collection work to private collection agencies that may call you.
“The Internal Revenue Service plans to begin private collection of certain overdue federal tax debts as early as spring of 2017 and has selected four contractors to implement the new program,” the IRS said in a press release.
The new program, authorized under a federal law enacted by Congress last December, enables these designated contractors to collect, on the government’s behalf, outstanding inactive tax receivables. Authorized under a federal law enacted by Congress in December 2015.
“As a condition of receiving a contract, these agencies must respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act,” said the Agency. “These private collection agencies will work on accounts where taxpayers owe money, but the IRS is no longer actively working them.”
Several factors contribute to the IRS assigning these accounts to private collection agencies, including older, overdue tax accounts or lack of resources preventing the IRS from working the cases.
The IRS said it would give taxpayers and their representative written notice that the accounts are being transferred to the private collection agencies. The agencies will send a second, separate letter to the taxpayer and their representative confirming this transfer.
The private collection agencies selected include Conserve of Fairport, New York; Pioneer of Horseheads, New York; Performant of
Livermore, California; and CBE Group of Cedar Falls, Iowa.
“These private collection agencies will be able to identify themselves as contractors of the IRS collecting taxes. Employees of these collection agencies must follow provisions of the Fair Debt Collection Practices Act and should be courteous and respect taxpayer rights,” the Agency said.
However, if you do not wish to work with the assigned private collection agency to settle your overdue tax account, you must submit a request in writing to the private collection agency.
The IRS stated that it would do everything it can to help taxpayers avoid confusion and understand their rights and tax responsibilities, particularly in light of continual phone scams where callers impersonate IRS agents and request immediate payment.
“Private collection agencies will not ask for payment on a prepaid debit card. Payment by check should be payable to the U.S. Treasury and sent directly to IRS, not the private collection agency,” said the Agency. ”Taxpayers will be informed about electronic payment options for taxpayers on IRS.gov/Pay Your Tax Bill.”
Even with private debt collection, you shouldn’t receive unexpected phone calls from the IRS demanding payment.
“When people owe tax, the IRS always sends several collection notices through the mail before making phone calls,” the Agency said. The IRS stated that it would not assign accounts to private collection agencies involving tax payers that are 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, and in presidentially declared disaster areas and requesting relief from collection.
To make a complaint about a private collection agency or report misconduct by its employee, call the TIGTA hotline at 800-366-4484 or visit www.tigta.gov. ■