Q. Is it true that the IRS is now using third party organizations for debt collection, and they are telephoning representing the IRS?
A. Yes, Better Business Bureau Serving Southeast Tennessee and Northwest Georgia is alerting consumers the Internal Revenue Service (IRS) plans to hire private collections agencies to collect certain overdue taxes. The IRS reports the new collection program could begin as early as this spring.
According to the IRS, private collection agencies will work on accounts where taxpayers owe money, but the IRS is no longer actively working them. The agencies are:
- CBE Group in Cedar Falls, Iowa
- Conserve, in Fairport, N.Y.
- Performant in Livermore, Calif.
- Pioneer in Horse- heads, N.Y.
The IRS will give taxpayers and their representative written notice that the accounts are being transferred to the private collection agencies. The agencies will send a second, separate letter to the taxpayer and their representative confirming this transfer.
Private collection agencies will be able to identify themselves as contractors of the IRS collecting taxes. Employees of those collection agencies must follow provisions of the Fair Debt Collection Practices Act and should be courteous and respect taxpayer rights.
Taxpayers will be informed about electronic payment options for taxpayers at IRS.gov/Pay Your Tax Bill. Payment by check should be payable to the U.S. Treasury and be sent directly to IRS, not the private collection agency.
The IRS 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. Note, if you do not wish to work with the assigned private collection agency to settle your overdue tax account, you must submit a request in writing to the private collection agency.
IRS will not assign accounts to private collection agencies involving taxpayers who are deceased, under the age of 18, in designated combat zones, victims of tax-related identity theft or currently under examination, litigation, criminal investigation or a levy. The collection agencies will also not collect if the person is subject to an installment agreement, subject to a right of appeal, classified as an innocent spouse or in presidentially declared disaster areas and requesting relief from collection.
The IRS also urges consumers to be on the lookout for unexpected scam phone calls from anyone claiming to be collecting on behalf of the tax agency. This is particularly important in light of continuing scams where callers impersonate IRS agents and request immediate payment.
BBB offers the following tips to avoid current and future IRS scams resulting from this change:
- Always check with BBB if you suspect a scam. Consumers can also report scams at bbb.org/scamtracker. It is a scam if someone calls to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer. The IRS will first mail you a bill if you owe taxes.
- The IRS will never make immediate threats to involve local police or other law-enforcement groups to have you arrested for not paying. The federal agency will never demand anyone pay taxes without giving them the opportunity to question or appeal the amount they owe.
- IRS will never ask for credit or debit card numbers over the phone.
Jim Winsett is president of the Better Business Bureau in Chattanooga.