The IRS in News Release IR-2016-125 provided information regarding the use of private debt collectors to pursue unpaid taxes mandated by Congress in the Protecting Americans from Tax Hikes Act of 2015.
The IRS had been mandated to begin using the private agencies earlier this year, but the IRS has delayed the beginning of the program and will, per the announcement, begin using the agencies in the spring of 2017, though an exact date for the start was not announced.
The four contractors who will be handling these collections are:
- CBE Group of Cedar Falls, IA
- Conserve of Fairport, KY
- Performant of Livermore, CA
- Pioneer of Horseheads, NY
One key area of concern involves the potential (or, in this author’s view, virtual certainty) that those perpetrating telephone frauds will begin claiming to be collection agencies working with the IRS. The IRS has provided the following procedures that will be followed under the program to attempt to address these issues:
The IRS will give each taxpayer and their representative written notice that their account is being transferred to a private collection agency. The agency will then send a second, separate letter to the taxpayer and their representative confirming this transfer.
The IRS goes on to claim:
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.
Advisers likely need to give specific information to their clients regarding these procedures, since they only will serve to protect individuals who are aware of these procedures. That includes those who owe no taxes, since obviously those make fraudulent calls are not simply going to call delinquent taxpayers.
The news release goes on to note:
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.