What is Private Debt Collection?

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IRS PAYMENT OPTIONS

Sometimes, the IRS may send your tax debt to a third party. There are three companies who have contracted with the IRS to try to collect the tax debt. 

• CBE GROUP INC - IA

• COAST PROFESSIONAL INC - NY

• CONSERVE - NY

You may receive a letter from one of the private debt collection companies asking you to contact them to resolve past tax debt. So, why was my tax debt sent to a third party to begin with and what are my options? 

Below is a short list as to why the IRS sent your file to one of the three collection agencies 

• The IRS cannot locate you or cannot get in touch with you. 

• A year has passed since you signed a power of attorney 2848 form, in which a representative was supposed to get in contact with the IRS on your behalf. 

• More than 2 years have passed and the account was not assigned for collection. 

If you receive a letter from one of the three collection agencies, you should get in contact with them so you can set up payment arrangements. Never pay them directly. All money will still get sent to the IRS directly. Unfortunately, if you are seeking other alternative options to resolve the tax debt such as currently not collectible or offer in compromise. You will have to send the file back to the IRS in order to be considered for one of these other programs. 

Be careful you are working with a legitimate third party. Again the IRS communicates with taxpayers via mail. You should receive a CP 40 letter from the IRS as well as a letter from the collection agency. To learn more about the variety of tax scams visit IRS.gov. 

Have you received a letter from one of these agencies? If so, and you would like to know of other options please contact us so we can discuss in more detail. 

To learn more about how the private collection companies are helping the IRS go here to read the report.