The use of private debt collections for IRS tax debts

There has been a rash of IRS scam calls in which operators claim to be the IRS and intimidate and trick people into paying non-existent tax bills. The IRS has issued statement after statement to clarify legitimate tax collection processes from these scam calls. The IRS has said again and again that everyone should know that "the IRS never calls taxpayers". That is, if someone is calling you about a past tax debt, the call is not legitimate. On March 23, 2017 this all changed.


On March 23, a press release from the IRS indicated a completely different message. They said that now the IRS will call, but they should be able to distinguish a real call from a fake call. How? Well, the scammers are "rude and obnoxious" while the third party collection agencies the IRS uses are "professional".


Why you may want to avoid IRS private debt collectors

There are four private companies that have been tasked to collect back taxes. They are:


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


We don't claim to have a full understanding of how these companies work, but we do know this: Their public reviews are less than encouraging. Google reviews and Better Business Bureau reviews allege consistent rudeness, obnoxiousness and an overall lack of professionalism.


While we don't expect that people who are being collected from would have glowing reviews of a collection agency, many of the negative reviews are from ex-employees, and others that didn't owe any money.

Who thinks this is a bad idea? The IRS.

We know the IRS thinks private collection is a bad idea as they used collection agencies years ago but stopped  — because it was a waste of resources. The law used to be that the IRS could use outside collection agencies if the IRS determined it was a good idea. This changed in 2015 when the FAST Act was passed into law. Now it is mandatory that the IRS use third party collection agencies no matter how bad of an idea it is.


The best way to protect yourself from third party debt collectors? Stay on top of your tax profile; information is key. Sign up for a Total Tax Diagnosis subscription and get your IRS tax transcripts reviewed so you know exactly what the IRS thinks about you.


If you need assistance with a tax issue, or if you are unsure if you even have an issue, contact us. Call 888-727-8796 or email info@irsmedic.com.


Watch the video below for more information.