IRS using private tax-debt collectors
IRS hires collectors: The Internal Revenue Service will begin sending letters to a few hundred taxpayers notifying them that their long-overdue federal tax bills are being assigned to one of four private collection agencies.
The Internal Revenue Service will begin sending letters to a few hundred taxpayers this month, notifying them that their long-overdue federal tax bills are being assigned to one of four private collection agencies.
The new program, which was authorized by Congress in December 2015, allows representatives of the four contractors to collect unpaid tax debts on the government’s behalf. In most cases, the obligations were assessed years ago, and affected taxpayers have been notified.
The IRS expects to ramp up the program, sending out several thousand letters a week by summer. The agency said it will notify affected taxpayers before they hear from a debt collector.
The four collection firms authorized to participate are CBE Group of Cedar Falls, Iowa; Conserve of Fairport, N.Y.; Performant of Livermore, Calif.; and Pioneer of Horseheads, N.Y. No other groups are authorized to represent the IRS.
The private collectors will identify themselves as contractors of the IRS collecting taxes. They are authorized to discuss payment options with taxpayers, but any tax payments must be made directly to the IRS.
The IRS reminds taxpayers to beware of crooks who might seek to exploit taxpayer confusion over the program. “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,” said IRS Commissioner John Koskinen, in a prepared statement. “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.”
People unsure if they have an unpaid tax debt from a prior year can check their balance at www.irs.gov/balancedue.
The new program comes at a time when collection activities and audits have been dropping. The IRS reported a 40 percent decline in levies against delinquent accounts in fiscal 2016 compared with the prior year, and filed 9 percent fewer liens. Liens are legal claims on assets to satisfy unpaid taxes, while levies are actual seizures of assets.
The agency also reported fewer enforcement actions, with the IRS auditing just over 1 million individual income-tax returns, down 16 percent from 1.2 million in fiscal 2015. The audit rate for individuals fell to 0.7 percent, the lowest in more than a decade.
The agency collected more than $3.3 trillion last year and processed more than 244 million tax returns and related forms.