Things to Know About Private Tax Collectors

  • Robert S. Thomas,
  •   Taxation
  •   Comments Off on Things to Know About Private Tax Collectors


In recent years, there has been a growing trend of scammers, who call innocent victims and pretend to be IRS representatives. They ask for personal information (such as their social security number) or make threats of collection actions or arrest in order to get money from their victims. The media, and even the IRS, have warned the public to be vigilant of these calls. Unfortunately, the IRS is in the midst of creating mixed messages, which have already caused confusion and anger.

If you have an outstanding tax obligation with the IRS, you may be on the receiving end of calls from a debt collector who claims to be working on behalf of the IRS. Before you hang up the phone and chalk these efforts up to a scam, be warned that it may be a legitimate call. This is because in December 2015, Congress authorized the IRS to hire private debt collection companies to attempt to collect on certain outstanding tax debts.

The IRS thereby hired four collection agencies, CBE Group, ConServe, Performant Recovery and Pioneer, to pursue inactive tax debts. What are inactive tax debts? These are debts that are owed by a taxpayer, but that the IRS is no longer actively working on pursuing.

The IRS states in its public release that the IRS will send notices to taxpayers with inactive tax debts that their accounts are being transferred to an outside collection agency. Then, a collection agency is free to call the taxpayer and identify themselves as a contractor of the IRS. The IRS claims that these debt collectors “must follow provisions of the Fair Debt Collection Practices Act and should be courteous and respect taxpayer rights”; however, there have already been documented examples where this is not occurring.

According to call scripts of Pioneer Credit Recovery, revealed by the New York Times, debt collectors have been calling taxpayers, telling them to cash out their 401(K) accounts, take out home mortgages, or to use credit cards in order to satisfy their obligations to the IRS. The debt collector has also reportedly advised borrowing money from friends, families, and employers to pay off the debt. In addition, all four credit agencies have been accused of offering payment agreements that spread out a payment plan over seven years, when the maximum time legally allowed for debt collectors in typical collection actions is five years.

You Need a Tax Attorney

Unfortunately, the IRS does not seem to have a problem with these tactics. But you have legal rights, and if you are receiving questionable calls claiming to be from the IRS or a contractor of the IRS, you should immediately consult with an attorney. I have been a tax attorney for two decades, have a Master of Law Degree (LLM) in Taxation, and am licensed to practice in the United States Tax Court. Contact The Law Offices of Robert S. Thomas at 847-392-5893 for a consultation or visit our website today.

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