Tuesday, May 16, 2017

Warning – IRS to Hire Private Debt Collectors

In today’s society, scams involving the impersonation of IRS collection agents have become extremely common. In fact, nearly everyone has personally received calls from a person or machine claiming to be an IRS collection agent.

Unfortunately, beginning this year, the IRS will implement a new program that uses private debt collection companies to collect past-due amounts when the IRS no longer has sufficient resources to pursue collection. This new program will create a whirlwind of uncertainty for taxpayers, as they are already skeptical of such calls.

In order to prepare for this new program, it is important to know the following. The IRS is required to give notice to each taxpayer and his or her representative that an account has been transferred to a private debt collector, which will be followed up by a separate letter from the collection agency.

So far the IRS has chosen four private agencies to carry out the new program. The agencies must abide by the Fair Debt Collection Practices Act (FDCPA). The four private agencies are Conserve (Fairport, NY); Pioneer (Horseheads, NY) Performant (Livermore, CA); and CBE Group (Cedar Falls, IA). Additionally, pursuant to the FDCPA, the private agencies may not partake in any act that is deemed harassment.

Although this new program has enabled private debt collection with regard to overdue taxes, it is important to remain vigilant. Should you receive a call from a debt collector posing as the IRS absent a previous notification letter from both the IRS and the private agency, it is most likely a scam.