In 2004, the Internal Revenue Service (IRS) was first granted the power to outsource its tax debt collection to private agencies. This allowed for the IRS to grant the right to private agencies to locate where a taxpayer lived, contact the taxpayer, request full payment of taxes owed, offer an installment plan and obtain certain financial information from the taxpayer.
In 2017, a new plan was elected that granted the right of private collection to 4 contractors. These contractors are CBE Group, Conserve, Performant and Pioneer.
What can these Private Collection Agencies Do?
The private agencies can collect outstanding taxes that are due to the government for cases that the IRS is no longer actively working on. Both the IRS and the private agency will notify the taxpayer and their representative in writing that the matter is being transferred to a private agency. They are also authorized to identify themselves as contractors for the IRS.
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What are these Private Collection Agencies Prohibited from Doing?
However, these agencies are prohibited from asking for payment of overdue taxes on a prepaid debit card, iTunes card or gift card. Instead, the taxpayer is supposed to be informed about electronic payment options available to them in order to become current on overdue taxes.
Any payment made should be addressed to the government and sent directly to the IRS, as opposed to being sent directly to any of the private contractors. In addition, these private agencies will not be assigned on certain types of accounts, including when the taxpayers is:
- Under 18;
- In a designated combat zone; or
- In presidentially declared disaster area requesting relief from collection,
How are Taxpayer Rights Protected?
With the overwhelming amount of scams, it is important to protect taxpayer rights. The IRS made is a condition for the private debt agencies to respect taxpayer rights and to abide by the Fair Debt Collection Practices Act.
If you think you are being contact by an agency that is not legitimate, you should contact the IRS directly or reach out to an attorney.
Will I Need a Tax Attorney?
If you believe your rights during the collection process have been wrongfully violated, or you suspect that the private collection agencies engaged in unauthorized practices, you may want to speak to a tax attorney who can help preserve your rights and fight for any damages you suffered.