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IRS Hires Private Tax-Collection Agencies

Back on September 26, 2016, the Internal Revenue Service announced that it would hire private collection agencies to collect on certain overdue federal tax debts in the spring of 2017.  It has selected four contractors to implement the new program in the spring of 2017.

In their announcement the IRS stated it will 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.

The IRS will give each taxpayer and their representative written notice that their account is being transferred to a private collection agency. The IRS will then send a second, separate letter to the taxpayer and their representative confirming this transfer.

Private collection agencies will not ask for payment on a prepaid debit card. Taxpayers will be informed about electronic payment options for taxpayers on Your Tax Bill.  All payment by check should be payable to the “U.S. Treasury” and sent directly to IRS, not the private collection agency. 

These private collection agencies will work on accounts where taxpayers owe money, but the IRS is no longer actively working their accounts. The IRS cited several factors that contribute to the assignment of these accounts to private collection agencies, including, but not limited to, older, overdue tax accounts and lack of resources preventing the IRS from working the cases.

Private collection agencies will be able to identify themselves as contractors of the IRS when they are collecting taxes. Employees of these collection agencies must follow the provisions of the Fair Debt Collection Practices Act and must be courteous and respectful of taxpayers’ rights.

The private tax-collection program (authorized by Congress last December) enables these designated contractors to collect, on the government’s behalf, outstanding inactive tax receivables. 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. The IRS has selected the following four contractors to carry out this program:

CBE Group, 1309 Technology Parkway, Cedar Falls, IA 50613

Conserve, 200 Cross Keys Office Park, Fairport, NY 14450

Performant, 333 North Canyons Parkway, Livermore, CA 94551

Pioneer, 325 Daniel Zenker Drive, Horseheads, NY 14845

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