The IRS works with private collection agencies that work with taxpayers who have overdue tax bills. These agencies help taxpayers settle their tax debts. This page contains frequently asked questions about the program. The law requires the IRS to use private agencies to collect certain outstanding and inactive tax debts.
The Internal Revenue Service began using the services of private collection agencies (PCA) several years ago. The IRS instructs contracting PCAs to collect (or attempt to collect) inactive accounts receivable from taxpayers. Because this change in practice is so recent, it's only fair that taxpayers like you don't know what to expect. This is partly due to a drastic cut in IRS funding that only perpetuates low levels of consumer knowledge.
The Internal Revenue Service asked private debt collectors to help locate taxpayers with unresolved federal debts. Since the implementation of the FAST Act, there have been a multitude of reports of telephone scams made by people who claim to represent the IRS and demand immediate payment of outstanding tax debts. WASHINGTON The Internal Revenue Service has awarded new contracts to three private sector collection agencies for the collection of overdue tax debts. Only IRS employees can take these steps, such as filing a federal tax lien notice or issuing a lien.
Instead, hang up and call the IRS directly at 800-829-1040 to speak with a representative who can talk to you about any outstanding tax debts. If you receive the collection letter, call the IRS and tell them that you are collecting financial information, but whatever reason you can think of, it will take 30 to 60 days to arrive, and they will usually hold your file for at least 60 days. Employees of these collection agencies must follow the provisions of the Fair Debt Collection Practices Act and, like IRS employees, must be courteous and respect the rights of taxpayers. These receivables are tax debts that cannot be collected because the IRS cannot find the taxpayer, for example.
The best method to resolve your tax debts is to contact legal counsel with experience dealing with the IRS. Currently, the IRS requests the help of private collection agencies to follow up with taxpayers on overdue tax balances. However, each of these attempts to outsource collection functions resulted in failure, as they generated less revenue than originally expected, wasted money and contributed to large-scale inequalities in the United States. Other times, the IRS classifies a tax debt as an inactive account receivable because the taxpayer's representative hasn't contacted the IRS in a year or more.
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