IRS Tax Problems

IRS Contracts With Three Private Collection Agencies For Overdue Tax Debts

IRS Contracts With Three Private Collection Agencies For Overdue Tax Debts

In keeping with a law passed by Congress at the end of 2015, the Internal Revenue Service is required to use private debt collection companies to collect delinquent tax debts. In order to ensure that those with overdue tax debts are fully informed as to who they should expect to hear from, the agency has issued a press release announcing the names of those collection agencies with whom they have contracted. They are:

  • CBE Group, Inc. of Waterloo, Iowa
  • Coast Professional, Inc. of Albion, New York
  • ConServe of Fairport, New York

These companies have been tasked with collecting “inactive tax receivables,” which are defined as those that have been removed from those being actively collected by IRS employees due to lack of resources or inability to locate the taxpayer; those for which more than 1/3 of the applicable limitations period has lapsed and no IRS employee has been assigned; and those for which more than 365 days have passed without interaction with the taxpayer or a third party for the purposes of collecting the outstanding funds.

The outstanding debts that these agencies are not permitted to pursue include those subject to a pending or active offer-in-compromise or installment agreement; those classified as an innocent spouse case; those involving a taxpayer that has been identified as having died, being under the age of 18, in a designated combat zone, or a victim of tax-related identity theft; those under examination, litigation, criminal investigation, or levy; or those subject to a proper exercise of a right of appeal.

If you owe money to the IRS that is eligible for collection by a private collection agency, you will receive official notification from the IRS that your account has been transferred to them. This letter will be sent to both you and your tax representative and will include the name and contact information of the agency to which your account has been assigned. You will also be contacted by the agency itself confirming the account transfer. Both correspondences will include identifying information you can use to confirm the legitimacy of the agency when it contacts you and that they can use to confirm your identity.

Generally speaking, collection agencies have a reputation for behavior that can be overly aggressive. Under the terms of their contracts with the IRS, the companies listed above are required to follow the provisions of the Fair Debt Collection Practices Act and must be courteous and respectful of taxpayer rights. They are not authorized to take enforcement actions against taxpayers, as this is an action reserved for the IRS itself. Taxpayers should also be advised that the private firms are only authorized to discuss and set up payment options and agreements, but that all payments are to be made directly to the IRS and all checks are to be made payable to the United States Treasury. 

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Gordon W. McNamee

Gordon W. McNamee

Gordon W. McNamee is a Certified Public Accountant (CPA) based in Rancho Cucamonga, CA. Gordon W. McNamee can assist you with your tax return preparation, payroll, accounting and tax planning needs. <br /> <br /> 2021 is Gordon W. McNamee, CPAs 38th year in the profession. As as a former IRS agent (1984 through 1987), Gordon has been in public accounting since 1987. Gordon specializes in individual, corporate, HOA, trust, estate and payroll taxes. He also prepares financial statements and provides accounting & bookkeeping services. He enjoys making his clients feel at ease while providing a personalized professional service.

GORDON W. MCNAMEE, CPA
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