IRS Private Debt Collection Agency Outsourcing

Beginning in Spring/Summer 2017, the Internal Revenue Service (IRS) will begin implementing the use of private debt collection agencies to settle certain tax debts.  

The private debt collection agencies will need to abide by the Fair Debt Collection Practices Act and must respect taxpayer rights.  Four private debt collection agencies have been contracted by the IRS for the purposes of pursing those accounts where taxpayers owe money, but there are various factors involved where the IRS can no longer actively pursue them; such as older, overdue tax accounts.  The four agencies that have been contracted are CBE in Waterloo, Iowa; ConServe in Fairport, New York; Performant in Pleasanton, California; and Pioneer in Horseheads, New York.

There are situations where a tax account will not be transferred to private debt collection agencies: (1) the taxpayer in question is deceased, (2) under the age of eighteen, (3) a victim of tax-related identity theft, (4) in a designated combat zone,  (5) currently under examination, litigation, criminal investigation or levy, (6) where the taxpayer is subject to pending or active offers in compromise, (7) subject to an installment agreement, (8) subject to a right of appeal, (9) classified as an innocent spouse case, or (9) in presidentially-declared disaster areas and requesting relief from collection.

Before your tax account is assigned to a private debt collection agency, the IRS will give you and your representative, if applicable, written notice that the account(s) will be transferred to a private debt collection agency.  The agency will also send you a separate letter confirming that the IRS has transferred your tax account to them.  

These agencies will have the ability to identify themselves as contractors of the IRS.  Before receiving any phone calls, you should have previously received written communication from both the IRS and the private debt collection agency assigned to your account.  Although the IRS will be transferring your tax account to be handled by a private debt collection agency, you will not pay the collection agency directly to settle your tax debt.  Instead, you will pay the IRS directly either electronically through the IRS website or by check payable to the U.S. Treasury.  

In order to protect yourself from scams, it is imperative to know that you should receive written communication from the IRS before receiving any phone calls and that you should ensure your payment is sent to the IRS and not to a third party.