Have You Been Contacted by a Private Debt Collector About Your Taxes?
In 2017, the IRS began using private debt collectors to recover certain overdue federal debts from taxpayers. There are, however, only a few debt collectors that are actually allowed to collect debts on behalf of the federal government and those that are permitted to do so are required to comply with a strict set of procedures. To learn more about your own rights when it comes to debt collection practices, please contact an experienced Florida tax & IRS attorney who can advise you.
Authorized Private Debt Collection Programs
Only four private debt collection groups have been authorized to collect inactive tax debts on behalf of the IRS, including:
- The CBE Group in Cedar Falls, IA
- ConServe in Fairport, NY;
- Performant in Livermore, CA.; and
- Pioneer Financial in Horseheads, NY
The IRS is required to notify taxpayers before they can transfer an account to one of these private debt collection agencies. This notification must include the name and contact information of the collection agency, as well as:
- Notice CP40 and Publication 4518, which notify taxpayers about their overdue tax account; and
- An initial contact letter containing information on how to resolve the overdue tax debt.
Both documents will contain a Taxpayer Authentication Number, which is used to confirm a taxpayer’s identity and verify that the collection agency is legitimate.
What to do After Receiving a Notice
If you were recently notified that a private collection agency will be representing the IRS in attempting to recoup a tax debt from you, there are a few steps that you can take to help the process go more smoothly. For instance, it’s always a good idea to validate that the caller is a legitimate representative of one of the previously mentioned collection agencies. If, on the other hand, you erroneously received a tax bill because you have already paid the balance due on the account in question, you should start working with the agency to identify the payment that wasn’t applied. Otherwise, there are a number of ways to resolve tax debts taken on by private collection companies, including:
- Making a payment directly from a checking or savings account;
- Paying via pre-authorized direct debit;
- Using the Electronic Federal Tax Payment System;
- Paying with a credit card, check, or money order.
It’s important to note that private debt collectors are held to the same standard as the IRS when it comes to conforming to federal rules and regulations. For instance, private collection agencies are specifically prohibited from threatening or harassing taxpayers in an effort to recover a debt. Furthermore, private debt collectors are not allowed to take enforcement actions against taxpayers to collect on a debt. This means that debt collectors cannot file a tax lien or issue a levy against a taxpayer, although the IRS does still have the legal authority to take these kinds of enforcement actions.
Were You Contacted by a Private Collection Agency About a Tax Debt?
Please call our office at 386-490-9949 today to speak with experienced tax law attorney Ronald Cutler, P.A. about your own options for resolving a tax debt.