When private companies collect taxes for the IRS

Wednesday, November 20, 2019


Does the collection company calling really work for the IRS?

If you know you are current on your taxes and someone calls you demanding you pay your tax bill, it is a scam. However, if you do owe taxes to the federal government, the U.S. Internal Revenue Service (IRS) may assign your debt to a private debt collection company.

Here are some tips to verify that the collection efforts and the debt collectors are legitimate.

Before you are contacted by a private collection agency, you will receive two letters:

  1. The IRS will first send Notice CP40 and Publication 4518. These letters alert you that your overdue tax account was assigned to a private collection agency. The IRS will not call you—it will only mail you a letter.
  2. The private collection agency then sends its initial contact letter (the name of the company should match the name the IRS sent). The letter will explain how to resolve your tax bill. The company will not call you before sending this letter in the mail.

Both letters will contain a Taxpayer Authentication Number. Check to be sure that the Taxpayer Authentication Number in the collector’s letter is identical to the one you received from the IRS. Then store both letters in a safe place.

The IRS has hired four private debt collection companies to collect on certain overdue tax bills. When you speak to the collection company over the phone, make sure the name of the company matches one of the four companies listed below.

The company will ask you a series of questions to confirm your identity and use the authentication number that is in your letters.

Payments made to settle your tax bill can only be made to the IRS or to the U.S. Treasury. You will never be asked to pay the collection company directly, or an individual. Tax debts cannot be paid with a prepaid card, including gift cards or an iTunes card, or by wiring money.

If you feel the private collection agency has acted inappropriately, here’s how to report it.

If your tax debt has been transferred to a private collection agency, you will be contacted by one of these four companies on the government's behalf:





For more information, view the IRS video Private Collection of Overdue Taxes, or visit its private debt collection FAQs webpage.

To stay on top of the latest scam and fraudster news, read our monthly SCAM GRAM .




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