Have you been contacted by a private collection agency saying they are collecting a past due IRS tax bill? With all of the scams out there, it is important to know who legitimately can talk to you about your account if you know you are past due in payments to the IRS.
The IRS recently updated information concerning agencies they have hired for private debt collection on their website at www.IRS.gov. Once there, follow this link for more information: private debt collection questions and answers
Here are some things you should understand as a taxpayer about the private debt collection program. There are lots of scams out there, so make sure to research and understand your rights before discussing any personal information with a random caller.
- Before being contacted by a private collection agency, the taxpayer will receive two letters.
- Notice CP40 comes from the IRS to individual taxpayers. Business taxpayers receive a Notice CP140 from the IRS. These letters tell the taxpayer their overdue account was assigned to a private collection agency.
- An initial contact letter comes from the private collection agency. This letter has info on how the taxpayer can resolve their overdue taxes.
- You can also request a copy of your account transcript through the IRS' "Get Transcript" tool to verify the account was assigned to a private collection agency. The transcript will contain code 971 "collection referred to a private collection agency".
- Both letters contain a taxpayer authentication number. It's used by the collection agency to confirm the taxpayer's identity. It's also used by the taxpayer to verify the caller is from a legitimate collection agency.
- When contacted by a private collection agency on behalf of the IRS, the taxpayer should make sure the caller is from one of the private collection agencies listed by the IRS under their question and answer section (see link above).
- The private collection agency will ask to verify the taxpayers identity. They do so by asking for the taxpayer authentication number. will ask the taxpayer a series of questions to make sure they're talking to the correct person.
- The taxpayer will be asked to exchange portions of the taxpayer authentication number with the private collection agency. This allows the caller and the taxpayer to validate each other's identity.
Follow these steps to keep you safe from scammers. If you need help with payment plans or determining if the tax is old enough to be dischargeable, give me a call to discuss options!