It’s not enough that some of the most vulnerable taxpayers are targeted by scam artists, but now they are expected to know the difference between legitimate collectors hired by the IRS and scam artists.
The potential for disaster is on the minds of consumer watchdog groups and those who are concerned with protecting seniors. The IRS has now hired several private debt collection agencies to collect past due taxes. You can expect that more than a few scam artists will be jumping on this bandwagon.
Congress passed legislation in December 2015 that approved the IRS’s contracting with private debt collectors to collect certain debts. These private collection agencies can work on accounts where the taxpayer owes money and the IRS isn’t actively working on the account. That could be because the account is older or the IRS does not have the resources to keep pursuing the debt.
The New York Times article, “I.R.S. Enlists Debt Collectors to Recover Overdue Taxes notes that scammers have historically posed as the IRS to target vulnerable seniors to get personal information or money.
The IRS would never harass consumers over the phone. But this new program allows private debt collectors to contact taxpayers by phone. This may make it harder to know if a scammer is targeting the taxpayer.
Both in 1996 and 2006, the IRS tried to use collection agencies. However, both times, the programs failed, with the most recent attempt costing millions more than it took in. In addition, the program created thousands of complaints—one of which was the horror story about an older couple who received more than 150 phone calls in less than a month. Some changes were made.
The IRS will inform taxpayers by mail, if it is turning their collection issue over to a private debt collector. The debt collector must also send a written notice, once it receives the taxpayer's information, and collection agencies are required to comply with all debt collection laws. These laws prevent debt collectors from harassing consumers.
The IRS has contracted with these four debt collection companies:
- Conserve in Fairport, New York
- Pioneer in Horseheads, New York
- Performant in Livermore, California
- CBE Group in Cedar Falls, Iowa
The private collection agencies hired by the IRS will not ask for payment on prepaid debit cards, iTunes or gift cards. The only way to make a payment to a legitimate collection agency acting on behalf of the IRS will be to make an online payment to IRS.gov or by check, and checks should only be made out to the U.S. Treasury and mailed to the IRS. If someone is not sure, they should visit the IRS website.
Reference: The New York Times (April 20, 2017) “I.R.S. Enlists Debt Collectors to Recover Overdue Taxes”