IRS-debt-collectionswritten by Jay Logal

Once again Congress has mandated that the IRS use private debt collection agencies (PCA) in the pursuit of unpaid tax liabilities. The current mandate was included in the highway funding bill in late 2015. The term “once again” is used because this has been tried twice before: a pilot program in 1996 and a second program in 2006.

The IRS has begun assigning accounts to four different PCAs:

  1. CBE
  2. ConServe
  3. Performant
  4. Pioneer

A written notice from the IRS is to be sent to the taxpayer and their representative informing them that the accounts are being transferred to a PCA. The PCA is to send a second separate letter to the taxpayer and their representative confirming the transfer. After the letters are sent, the IRS expects the PCA to follow the provisions of the Fair Debt Collection Practices Act to collect the debt.

The IRS has said that they will not assign accounts to PCAs which involve the following taxpayers:

  • Deceased
  • Under the age of 18
  • In designated combat zones
  • Victims of tax-related identity theft
  • Currently under examination, litigation, criminal investigation or levy
  • Subject to pending or active offers in compromise
  • Subject to an installment agreement
  • Subject to a right of appeal
  • Classified as innocent spouse cases
  • In presidentially declared disaster areas and requesting relief from collection

Payments to settle these collection efforts are not to be made in any manner to the PCA. All payments are to be made to the US Treasury. Although the IRS is to oversee the collection efforts, it is likely that errors, mistakes, or misconduct will happen with the PCAs.

To make a complaint about a PCA call the Treasury Inspector General for Tax Administration Hotline at 800-366-4484. Contact The Whitlock Company in the event you find yourself involved with a PCA or any other IRS examination 417-881-0145.

For more information, click here to read our previous post http://www.whitlockco.com/irs-revives-private-tax-collection/