What does the IRS Using Private Debt Collectors Mean for Americans?

Like anything regarding your finances, you should be vigilant.

Do you owe money to the IRS?

Yes?

You could have a private debt collector contacting you to collect on your past-due taxes.

Why?

According to The New York Times article titled “I.R.S. Enlists Debt Collectors to Recover Overdue Taxes,” Congress passed legislation in December 2015 allowing the IRS to use the services of private debt collectors.

The reason for this?

The IRS wanted help collecting on cases the IRS does not have the resources to continue pursuing.

Why do people find this concerning?

Vulnerable populations like the elderly may be confused by these private collectors.

Scammers play off confusion.

Many fear such scammers will pose as private collectors to victimize the elderly.

Especially since methods will change.

How so?

The IRS never called individuals.

The private collectors will be allowed to call taxpayers regarding overdue taxes.

This makes posing as a collector far easier.

However, the IRS has specifically hired four debt collection agencies.

Which ones?

• Conserve in Fairport, New York
• Pioneer in Horseheads, New York
• Performant in Livermore, California
• CBE Group in Cedar Falls, Iowa

Has the IRS ever used private collection agencies prior to this year?

Yes.

In 1996 and 2006.

The result?

It was more trouble than it was worth.

How are they planning to address concerns?

Anyone whose case is being given to the private collectors will receive a mailing from the IRS.

These authorized debt collectors will also send written notice and must comply with certain debt-collection laws.

How IRS can an individual determine if the agency is legitimate or a scam?

All payments will be made by check or online at IRS.gov.

If made by check, it should be made payable to the "U.S, Treasury" and sent to the IRS.

The collection agency will never directly receive the money.

Payment will never be made on a gift card or prepaid debit card.

More information about this program is available on the IRS website.

Talk with your loved ones about these details so they will not be caught off guard.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: The New York Times (April 20, 2017) “I.R.S. Enlists Debt Collectors to Recover Overdue Taxes”