IRS has hired 3 new collection agencies

[Flyingifr]

The IRS has signed contracts with 3 new Collection Agencies to enlist their help in collecting past due tax debts. Unlike dealing with CA's collecting other debts (credit cards, doctor bills, loans, etc) you have the right to REJECT the CA;'s involvement simply by notifying the CA that you do not wish them to handle your account. Here is the relevant paragraph from IRS Publication 4518:

 

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The IRS now contracts with private collection agencies to assist us in collecting overdue tax accounts.
The Fixing America’s Surface Transportation Act signed by the President on December 4, 2015, requires the IRS to contract with private collection agencies to help collect certain federal tax debts. Other federal, state, and local government agencies already use private collection agencies to collect overdue accounts. The law includes strong protection of taxpayer rights.• Private collection agencies will be held to the same standards of service and taxpayer rights protection as the IRS requires of its own employees.• Your privacy will be fully maintained.
Confidentiality requirements and restrictions required by law will be strictly enforced.Private collection agencies under contract with us to collect overdue tax accounts are, with some exceptions set forth in the Internal Revenue Code, required to conform to the rules, regulations, and provisions of the Fair Debt Collection Practices Act. Specific provisions of this act prohibit private collection agencies from threatening or intimidating taxpayers.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.

Also please remember that the CA IS subject to FDCPA and FCRA and can be sued to enforce your rights and punish their violations under those two laws.

Here is a link from Accounting Today about this:  https://www.accountingtoday.com/news/irs-signs-three-new-collection-agencies?position=editorial_1&campaignname=V2_ACT_IRSWatch_20210503-09292021&utm_source=newsletter&utm_medium=email&utm_campaign=V2_ACT_IRSWatch_20210503%2B'-'%2B09292021&bt_ee=PYx7rSQfGP6Gthg5q%2B2lxE01G6aLQmQ6yADhxyB2uzXt%2BXE9TOOsJ9GTse66CCPd&bt_ts=1632931484197

 

Here is the text of Accounting Today's article:

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Seriously tax-delinquent clients may soon hear from someone new.

The Internal Revenue Service has awarded contracts to three private collection agencies for collection of overdue tax debts. The new contracts begin Thursday, Sept. 23, when old collection-agency contracts expire.

The three agencies are:

• CBE Group Inc., PO Box 2217, Waterloo, Iowa, 50704; (800) 910-5837; 
• Coast Professional Inc., PO Box 526, Albion, New York, 14411; (888) 928-0510; and,
• ConServe, PO Box 307, Fairport, New York, 14450; (844) 853-4875.

The IRS stressed that it always notify a taxpayer before transferring their account to a collection agency. First, the service will send a letter to the taxpayer and their tax rep informing them that their account was assigned to a collection agency and giving the name and contact information for the agency.

 

This mailing will include a copy of Publication 4518, “What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency.”

The agency will then send its own letter to the taxpayer and their representative confirming the account transfer. The collectors will identify themselves as contractors collecting taxes on behalf of the IRS.

Clients may need reminders that private firms can’t take enforcement actions against taxpayers. The collection agencies can discuss payment options, including setting up payment agreements with taxpayers. Any tax payment must go directly to the IRS.

 

[Amerikaner83]

2 hours ago, Flyingifr said:

The agency will then send its own letter to the taxpayer and their representative confirming the account transfer. The collectors will identify themselves as contractors collecting taxes on behalf of the IRS.

Clients may need reminders that private firms can’t take enforcement actions against taxpayers. The collection agencies can discuss payment options, including setting up payment agreements with taxpayers. Any tax payment must go directly to the IRS.

So, the CA will be acting as "contractors", eh?  Hmm...and I wonder what sort of "convenience fees" they'll be adding - since tax payments will be going direct to IRS, I imagine these fine folks won't be skimming anything off the top.  ?

Hmm

[Flyingifr]

On 9/29/2021 at 1:01 PM, Amerikaner83 said:

So, the CA will be acting as "contractors", eh?  Hmm...and I wonder what sort of "convenience fees" they'll be adding - since tax payments will be going direct to IRS, I imagine these fine folks won't be skimming anything off the top.  ?

Hmm

Federal Law and existing IRS procedures allow the IRS to assess only the allowed fee for payment by Debit or credit card. The CA's must direct all credit/debit card payments through the IRS payment web site at www.irs.gov/payments/pay-your-taxes-by-debit-or-credit-card   These fees are approximately what the credit card clearing companies charge the IRS (generally between 2% to 4% depending on whether debit or credit and which clearing company the taxpayer chooses).  IRS collection agencies are forbidden to demand or accept payment through prepaid gift cards or debit cards. Payments bu check or money order are to be paid directly to the IRS, not the CA. The CA is therefore there to pester you into paying, but not to actually collect the debt.

 

https://www.irs.gov/businesses/small-businesses-self-employed/private-debt-collection-accounts-assigned-to-private-collection-agencies

 

https://www.irs.gov/payments/pay-your-taxes-by-debit-or-credit-card

Edited October 2, 2021 by Flyingifr
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[KylieHolmes]

Sounds like they are having their cake and eating it too!