If you've received IRS Notice CP40, it means that the IRS is notifying you that they have assigned your tax account to a private collection agency for collection. The IRS is mandated to use these agencies because of a law that passed in 2015 to collect on certain unpaid tax accounts.
What should you do
- You can read Publication 4518, What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency (.pdf) for more information
- Access the IRS Private Debt Collection (PDC) webpage. This is a useful tool to ensure you aren't falling victime to a scam (more below)
- Contact the private collection agency at the phone number on the notice
- Wait until the private collection agency contacts you
- Contact us for help. If you choose to hire us, we can contact the collection agency on your behalf.
How can you be sure the private collection agency contacting you is under contract with the IRS?
There are countless scammers out there that pretend to be the IRS. They call people, they send fake mails and emails. So how do you know you're not dealing with a scammer?
The IRS says:
"Your CP 40 notice contains the name and contact information of the private collection agency assigned your account. The names of all the private collection agencies under contract with the IRS can be found on IRS.gov. The private collection agency will also send you a letter confirming assignment of your tax account."
I don't think this is 100% foolproof as scammers could easily send a fake letter pretending to be coming from one of theses agencies and list a fraudulent call back number. When in doubt, be wary. Never provide any of your personal information to someone that calls you, such as your social security number.
Can the collection agencies work with me on payments?
The short answer is yes. They can advise you on how to pay in full, or work with you to set up a payment arrangement if you can’t full pay when contacted. I'd be wary about this. You will be dealing with someone in a call center who has gone through basic IRS training.
They will not have your best interest at heart and may not be well versed in the payment option that is best for you. At most they could work with you to set up an Installment Agreement, but they cannot help you with things like an Offer in Compromise, Currently non-collectible status, or Innocent Spouse issues.
To learn more watch our video on this topic:
If you do not wish to work with your assigned private collection agency to settle your overdue tax account, you must submit this request in writing to the private collection agency. If you prefer to hire representation to do so, contact us. We can help. Call us at 888-727-8796 or email info@irsmedic.com.
