The IRS is now using four private collection agencies to assist in collecting overdue taxes from delinquent taxpayers. The agencies are: CBE Group of Cedar Falls, Iowa; Conserve of Fairport, New York; Performant of Livermore, California; and Pioneer of Horseheads, New York.
Here is how the new process will work:

  1. The IRS will send to the taxpayer a letter stating that it has assigned his or her account to a private collection agency (“PCA”). The letter will give the name and contact information for the PCA.
  2. The designated PCA will send a letter to the taxpayer confirming that the IRS has transferred the taxpayer’s account to the PCA. After that, the PCA may contact the taxpayer by phone and mail to attempt to collect the delinquent taxes.
  3. The PCA may discuss payment options, including setting up payment agreements. However, the PCA has no authority to accept payments from taxpayers directly. Instead, the taxpayer must make all taxpayers either electronically or by check to the United States Treasury.
  4. The PCA may not take enforcement actions against taxpayers, such as filing a lien or issuing a levy. Only the IRS can take these actions.

The use of PCAs increases the risk of phone scams. IRS Commissioner John Koskinen says:

Here’s a simple rule to keep in mind. You won’t get a call from a private collection firm unless you have unpaid tax debts going back several years and you’ve already heard from the IRS multiple times. The people included in the private collection program typically already know they have a tax issue. If you get a call from someone saying they’re from one of these groups and you’ve paid your taxes, that’s a sure sign of a scam.

If the person on the line does any of the following, it is likely that he or she is a scammer and not a PCA:

  • Calls to demand immediate payment using a payment method such as a prepaid debit card, gift card, or wire transfer.
  • Threatens to immediately bring in local police or other law-enforcement groups to have the taxpayer arrested for not paying.
  • Demands that the taxpayer pay the taxes without giving the taxpayer the opportunity to question or appeal the amount owed.
  • Asks for credit or debit card numbers over the phone.