ou may have heard the adage “The IRS will never call you”, commonly shared among taxpayers to help distance friends and loved-ones from telephone scammers. While it is always wise to be extra careful with anyone claiming to be contacting you on behalf of the IRS, the line has recently become a little more blurred.
The Internal Revenue Service has begun a new private collection program of certain overdue federal tax debts; selecting four contractors to implement it.
The new program, authorized under a federal law enacted by Congress, enables these designated contractors to collect, on the government’s behalf, outstanding inactive tax receivables.
As a condition of receiving a contract, these agencies must respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act.
These private collection agencies will work on accounts where taxpayers owe money, but the IRS is no longer actively working them. Several factors contribute to the IRS assigning these accounts to private collection agencies, including older, overdue tax accounts or lack of resources preventing the IRS from working the cases.
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 these collection agencies must follow provisions of the Fair Debt Collection Practices Act and should be courteous and respect taxpayer rights.
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.
Private collection agencies will not ask for payment on a prepaid debit, iTunes or gift card. Taxpayers will be informed about electronic payment options for taxpayers on IRS.gov. Payment by check should be payable to the U.S. Treasury and sent directly to IRS, not the private collection agency.