IRS Use of Private Debt Collectors Begins April 2017

Beginning this month as result of federal legislation enacted in December of 2015, the Internal Revenue Service will begin using private debt collectors to collect certain outstanding inactive tax receivables. The Fixing America’s Surface Transportation Act, in fact, requires the use of private collection agencies for certain tax debt that the IRS is no longer actively working on collecting.

The IRS has announced that CBE, Conserve, Performant, and Pioneer and the four private collection agencies that will be assigned collection matters. With the ever-present risk of tax related scams, the IRS has provided guidance regarding the procedures when the accounts are transferred to the private debt collection agencies.

First, a taxpayer will receive written notices from both the IRS and the private collection agency indicating that the private collection agency will be handling the collection. The private collection agency representatives are also required to identify themselves as debt collectors and will be required to follow the Fair Debt Collection Practices Act.

Taxpayers who are contacted by a private debt collector should ensure that the contract is from one of the above listed private debt collection agencies and that they have received the proper notices listed above. In the event a taxpayer is contacted regarding a tax debt, you may wish to confirm the accuracy of such debt using the IRS’s new balance check, available at https://www.irs.gov/uac/view-your-tax-account.

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