By Eric P. Rothenberg, Esq. –
The Internal Revenue Service [“IRS”] announced on April 5th , 2017 that they will begin to use private collection agencies to collect back taxes owed. Soon, the IRS will begin its process of sending letters to certain taxpayers that their past due federal tax accounts are being turned over to a private debt collection agency. This isn’t the first time they had this program. It’s a renewed program that uses private-sector collection agencies (PCA) which were first authorized under the Fixing America’s Surface Transportation [“FAST”] Act of 2015.
“Here’s a simple rule to keep in mind. You won’t get a call from a private collection firm unless you have unpaid tax debts going back several years and you’ve already heard from the IRS multiple times,” said IRS Commissioner John Koskinen. “The people included in the private collection program typically already know they have a tax issue.”
The IRS will mail out letters to taxpayers and their authorized tax representatives [those with a Power of Attorney or Form 2848] consisting of some 400 cases over the next four weeks and intends to increase that number to 4,000 a week by this summer, IRS officials told reporters. These letters will include information about the specific collection agency company to which their case has been assigned so they will know, in advance, which PCA has been assigned to them. Only after the IRS notifies taxpayers, the assigned PCA will send a letter and contact the taxpayer.
There are only four private collection agency firms that have been allowed for this program to work as contractors for the IRS:
(1) CBE Group of Cedar Falls, Iowa;
(2) Conserve of Fairport, N.Y.;
(3) Performant of Livermore, Calif.; and
(4) Pioneer of Horseheads, N.Y.
There are currently no plans for any other private firms to be authorized to represent the IRS. More importantly, payments should NOT be sent to any of these collection agencies, the IRS officials noted. The IRS will still continue to receive any taxpayer payments to be made and your payment should still be payable to the United States Treasury.