IRS hires private collection agencies

Posted at 7:46 PM, Mar 24, 2017
and last updated 2017-03-25 00:47:15-04

As it gets close to tax time the IRS is reminding people to remain aware of phone scams. And advocates warn, new debt collection efforts by the agency and outside collectors, may have opened the door for more scammers.

“Unfortunately this has opened up the door for con-men who like to pose as collection agencies and like to pose as the IRS,” said Sheryl Reichert, the President and CEO of the Better Business Bureau San Diego, Orange and Imperial Counties

According to the IRS, the private debt collection program was authorized under a federal law enacted by Congress last December.

The IRS website says it, “enables these designated contractors to collect, on the government’s behalf, outstanding inactive tax receivables.”

There will be four collection agencies authorized under the program.

The IRS says its authorized private collection agencies will never call to demand immediate payment using a specific payment method such as a prepaid debit gift card, gift card or wire transfer.

They will also not demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

While Reichert understands the collections process, and need for the program, she worries bringing in the third party collector means they can no longer say the IRS won’t be calling you as a way to deter people from falling victim to a scam.

"When someone calls you identifying themselves as people of authority you need to take a breath and make sure that you're convinced that they are who they say they are,” she said.

The IRS says it “will give taxpayers and their representative written notice when their account is being transferred to a private collection agency. The collection agency will then send a second, separate letter to the taxpayer and their representative confirming this transfer. 

Information contained in these letters will help taxpayers identify the tax amount owed and help ensure that future collection agency calls are legitimate.

To learn more about Tax scams and warning: