IRS Update: Private Companies Will Now Collect Federal Tax Debts

On Monday, the IRS announced that it would have private companies collect Federal tax debts, pursuant to a federal law enacted by Congress in December.  They chose for contractors to do this: CBE Group in Iowa, Conserve and Pioneer in New York, and Performant in California.  The goal of this program is to collect outstanding inactive tax receivables.  While typically tax debt is considered non-consumer debt in Indiana, a provision of the contract between the IRS and these companies is that the companies will abide by the provisions of the Fair Debt Collection Practices Act, which applies to consumer debt.    If the IRS turns the debt over to these companies, the IRS will not actively work on the account.  The IRS stated they will consider many factors in determining which accounts are given to the collection agencies including older taxes, overdue accounts, or the lack of resources which prevent the IRS from working on a case.  If your case is turned over to one of these collection companies, you will receive a notice from the IRS stating that the IRS is turning your account over to the collection agency.  The collection agency should provide you with the IRS’ taxpayer bill of rights as well as a separate letter stating that the transfer has occurred.

Julie Camden of Camden & Meridew, P.C. practices in the area tax law. Julie has litigated various issues related to all kinds of tax obligations. If you would like to schedule an appointment, please contact our office at 317-770-0000 or complete our online contact form.

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