Taxes Collected by Private Collection Agencies

The IRS now can and does use private agencies to collect some taxes. The private collection agencies are typically used for older and overdue tax accounts or if the IRS is unable to work the case due to lack of resources.

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Taxpayers are notified by the IRS before their account is transferred to a private collection agency. A letter is sent to both the taxpayer and their tax representative notifying them that their account is being transferred to a private agency and the associated agency name and contact information. They are also provided with an explanation of what to expect when their account is assigned to a private agency. The taxpayer and their representative will then be sent a letter from the agency confirming the transfer.

The IRS has contracted with 4 different agencies. Only one will be used per account. They are CBE Group of Cedar Falls, Iowa; Conserve of Fairport, N.Y.; Performant of Livermore, Calif.; and Pioneer of Horseheads, N.Y. They will identify themselves by name and as contractors of the IRS collecting taxes.

Taxpayers will be instructed to pay their taxes directly to the IRS, not to the agency. They will have the options to pay by electronic payment on or by check to the U.S. Treasury sent directly to the IRS. It is very important to note that taxpayers will not be asked to pay via a prepaid debit, iTunes, or gift card.

Taxes can be confusing and daunting. Contact your accountant or lawyer with any questions.