To collect unpaid taxes, the IRS is turning to private companies. The growing backlog of debt is proving too much for the agency, which announced this past April that it's turning to four debt collection companies to round up outstanding payments from taxpayers who've been contacted numerous times and still haven't coughed up any cash.
The new private debt collection program started slowly, with just a few hundred taxpayers a week receiving mailings and subsequent calls. But now it's in full swing, with thousands of people being contacted.
Taxpayers with long-overdue tax bills who've received several collection notices from the IRS through the mail are now being informed that their accounts have been transferred to private collectors. The collection agencies send letters of their own, clearly identifying themselves in all communications as working for the IRS.
Of course, these new debt collectors need to follow the Fair Debt Collection Practices Act, which spells out when they can call, whom they can call, and what they can and cannot say. The IRS has told the collectors not to use robocalls to contact taxpayers.
The new private debt collection program comes straight from Congress, which required this action, noting that it's a way to fund road improvement projects for the Fixing America's Surface Transportation Act, which was passed in 2015.
The four collection agencies are CBE, ConServe, Performant and Pioneer Credit Recovery. Pioneer's corporate communications department pointed out a page on its website that tells people to expect fair treatment and quality service, confirming taxpayers' rights and complying with debt collection rules and consumer protections.
A problem jumps into anyone's mind: how to tell the official debt collectors from the scammers. IRS Commissioner John Koskinen realizes this dilemma, noting, "The IRS urges taxpayers to be on the lookout for scammers who might use this program as a cover to trick people."
So, how can taxpayers protect themselves from new scams? The Federal Trade Commission plans to update its warnings about IRS imposter scammers due to the new debt collection program. There are some simple ways to tell whether the call is legitimate or from a fraudster. It's a scam if the caller does any of the following:
Legitimate private debt collection firms will instruct taxpayers to send a check, made out to the U.S. Treasury, directly to the IRS. It's always a good idea to check with us to keep up to date with the new program and the new scams that come from it. Of course, if you have an outstanding debt to the IRS, contact us immediately so we can help you with the process of paying the government what you owe.
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