Private Collection of Overdue Taxes
The Internal Revenue Service today announced that, beginning this month, it would begin private collection of overdue taxes. This means that the IRS will use certain specified private collection agencies to collect overdue federal taxes. The action was not unexpected and has had an almost two year roll out, having been authorized by an Act of Congress back in December, 2015.
Four Private Collection Agencies Chosen
The proposed action was cited in the April 4, 2016 IRS Newswire Issue Number IR-2017-74. According to a previous IRS announcement, IR-2016-125 made on September 26, 2016, the four authorized collection agencies are CBE Group, of 1309 Technology Parkway, Cedar Falls, IA 50613; Conserve, of 200 CrossKeys Office Park, Fairport, NY 14450; Performant, of 333 North Canyons Parkway, Livermore, CA 94551; and Pioneer, of 325 Daniel Zenker Drive, Horseheads, NY 14845. The four agencies are tasked with collecting outstanding, inactive tax receivables owed to the federal government. As a condition of receiving an IRS contract, the agencies were each required to pledge to respect taxpayer rights and, among other things, abide by the terms and conditions of the Fair Debt Collection Practices Act, or FDCPA.
How the Program Will Work
The IRS will continue to attempt initial collection of a federal tax debt. The IRS typically employs multiple contacts, letters and telephone calls in its effort to collect a tax debt. Those actions aren’t expected to change. Rater, beginning this week, the IRS intends to use private collection agencies to collect tax debts that its been unable to collect itself. The program is intended to roll out with a few hundred taxpayers receiving initial mailings and follow-up phone calls. That number is expected to increase to several thousand taxpayers beginning next week and continuing to increase thereafter through the spring and summer.
The IRS will always notify a taxpayer before it transfers their file for the private collection of overdue taxes. It will do so by first notifying the taxpayer, by mail, that it intends to refer their account to a private collection agency, or PCA. A copy of the referral will also be sent to the taxpayer’s representative, if one exists. The notification will include a copy of IRS Publication 4518, What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency.
Notably, the taxpayer’s account will only be assigned to one of the four PCAs, never to all four. Furthermore, the IRS Newswire statement makes clear that no other private group is authorized to represent the IRS.
Once the taxpayer’s file has been referred to a PCA, that agency will send a letter to the taxpayer, and their representative, about the referral and account transfer. Both the IRS referral letter and the initial PCA letter to the taxpayer will contain information that will assist taxpayers with identifying the legitimacy of the account transfer to the PCA.
Today’s IRS Newswire makes clear that, despite the initiation of private collection of overdue taxes, taxpayers are to continue to make payments solely to the IRS or Department of the Treasury, and not to the private collection agency or other third party.
Contact Mackay, Caswell & Callahan, P.C.
If you’re a taxpayer and faced with private collection of overdue taxes, call one of our Upstate New York tax attorneys or New York City tax attorneys today. With over 30 years’ experience and with offices in Albany, New York City, Rochester, Syracuse, Utica and Watertown,we have a New York tax attorney ready to help you with your back taxes.
by Joseph M. Callahan, Esq.
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