The IRS reactivated a program last year that used private debt collectors to collect unpaid taxes from taxpayers with delinquent tax debts. The new program allows four designated contractors to collect outstanding tax debts on the governments behalf. The companies will get a percentage of the tax debt they are able to collect.
The four agencies in the debt collection program are: CBE group out of Iowa, ConServe out of New York, Performant out of California and Pioneer out of New York. If your account is transferred to one of the agencies, the IRS will let you know. You and your representatives will receive a written notice when your account is being transferred. You will then receive a second letter from the assigned agency to confirm this transfer. These private agencies will identify themselves as contractors of the IRS who have been assigned to collect taxes. (Be sure to refer to the list of contractors if you receive a letter from a private agency to ensure they are a qualified contractor.)
The percentage paid to the four companies are being kept a secret and chances are they will be kept secret. What we do know is the percentages vary depending on the size of the account. The IRS is allowed to keep the percentage a secret due to the holdings in Scott A. Hodes v Internal Revenue Service and United States Department of Treasury. The IRS did release the categories but redacted the percentages.
- Category One: Individual accounts with balance due $10,000 or less
- Category Two: Individual accounts with balance due $10,001 — $50,000
- Category Three: Individual accounts with balance due $50,001 and above
- Category Four: Additional account types
The four agencies are required to respect taxpayer’s rights and abide by the consumer protection provisions of the Fair Debt Collection Practices Act. The accounts the agencies receive are accounts where taxpayers owe money, but the IRS is no longer actively working them. Older, overdue tax accounts are more likely to be assigned to the private collections agencies. The IRS is going to notify you when your account is transferred to a collection agency.