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IRS selects 4 private collection agencies to go after overdue tax debts in 2017

September 26, 2016

If you have an old federal tax debt, you might be getting a call from a private debt collection agency next year.

By-law-we-must-collect-tax-sign

Under provisions of the transportation bill enacted last year, the Internal Revenue Service is once again to turn over some delinquent tax accounts to private debt collectors.

That process will begin in 2017.

And today, the IRS announced the a private collection agencies, or PCAs, that it has selected to do the job. They are:

CBE Group
1309 Technology Parkway
Cedar Falls, Iowa 50613

Conserve
200 CrossKeys Office Park
Fairport, New York 14450

Performant
333 North Canyons Parkway
Livermore, California 94551

Pioneer
325 Daniel Zenker Drive
Horseheads, New York 14845

Now that you've got the names of the debt collectors who'll be trying to bring in overdue tax amounts, here are some other questions and answers about the upcoming process.

Which accounts will be outsourced?
You will hear from one of the IRS-designated private collection agencies if your tax account has been designated by the IRS as inactive.

The IRS says it took into consideration several factors in assigning these accounts to private collection agencies, including the age of the overdue tax accounts or limits on IRS resources that have prevented the agency from working the cases.

Will the collector just call me?
No. You should not get a cold call about your old tax bill. Before you hear from a PCA, you should first get word from the IRS that your account is being turned over to one of the collection agencies.

The IRS says it will give each affected taxpayers and their representatives written notice that their account is going into private collection.

The agency to which your account is transferred then will then send a second, separate letter to the taxpayer and their representative confirming this transfer.

What should I expect from the PCA?
Private collection agencies will be able to identify themselves as contractors of the IRS collecting taxes.

Employees of these collection agencies must follow the provisions of the Fair Debt Collection Practices Act and must be courteous and respect taxpayer rights.

The PCA should inform taxpayers who owe the IRS about electronic payment options that are available on the IRS' Pay Your Tax Bill web page.

The PCA also should let the taxpayers know that if they want to make any overdue tax payment by check, they should make it payable to the U.S. Treasury and sent directly to IRS.

What can't the PCA do?
The private collector will not ask for payment of the due tax on a prepaid debit card.

Neither will the private tax debt collector ask/demand that a tax payment be made by check payable to the private collection agency or the individual PCA representative who is calling.

If this happens, it's either a PCA mistakenly or maliciously breaking the IRS-contacted collection rules or it's a scam.

Either way, let the IRS know if either of these or other types of questionable payment requests or demands are made.

Tried, and failed, before: This is the third time the IRS has tried private collectors to bring in overdue taxes.

The first time was in 1996. That lasted just more than a year, costing about $1 million to bring in around $3 million.

From 2006 to 2009, the second PCA-IRS effort brought in $98 million in previously uncollected taxes. But it cost $47 million. Then-IRS Commissioner Douglas Shulman ended this effort, saying the collection work "is best done by IRS employees."

Maybe the third time will be a charm. I hope that's true for both taxpayers and the IRS.

But I've also watched as problems and inefficiencies and yes, straight out skeevy private debt collection tactics — a scorpion will be a scorpion, after all — cropped up in the earlier attempts to parcel out IRS collection duties to private companies.

So I, along with the IRS and skeptical members of Congress who opposed this latest private tax debt collection, will be watching what happens with these accounts in 2017.

You also might find these items of interest:

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TO WRAP UP 2026

It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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