BBB Warning: IRS May Call You After All
Some Taxpayer Debts Assigned to Private Collection Agencies
(Lake Havasu City, AZ – April 20, 2017) The Internal Revenue Service (IRS) has changed the way it deals with overdue taxes, and that means third party collection agencies may now call.
Like the IRS, Better Business Bureau (BBB) is concerned this change might lead to scammers trying new ways to trick people. Here is what you need to know about the program that started in April 2017.
A federal law signed in 2015 allows four contractors to collect unpaid tax debts for the government. According to the IRS, these are unpaid tax debts that were assessed several years ago and which the agency is no longer trying to collect directly.
The four companies contracted by the IRS are BBB Accredited Businesses:
1309 Technology Pkwy
Cedar Falls, IA 50613
200 CrossKeys Office park
Fairport, NY 14450
333 N Canyons Pkwy
Livermore, CA 94551
325 Daniel Zenker Dr
Horseheads, NY 14845
There are many ways to tell whether a call about tax debt is legitimate. According to the IRS, people with overdue taxes will receive multiple notifications, including letters and phone calls, from the IRS first. The IRS will also notify taxpayers before sending accounts to a private collection agency.
Here’s how it will work and how you can tell the difference between a legitimate debt collector and a scammer:
- The IRS and the private debt collection company will both send a letter to the taxpayer first. If you get a call first and had no idea you owed taxes, be cautious. NOTE: Taxpayers who have recently moved may have missed notification letters, which can lead to confusion if their first contact is from the collection agency. Taxpayers can use Form 8822 to update the IRS with a new address at www.irs.gov/uac/form-8822-change-of-address.
- Private debt collectors will be able to identify themselves as contractors of the IRS collecting taxes. These employees must comply with the Fair Debt Collection Practices Act and, like IRS employees, must be courteous and respect taxpayers’ rights. If the caller yells, curses, or threatens arrest, it is not a legitimate collector. Hang up.
- Private debt collectors will not ask for, and cannot accept, credit card information over the phone. Consumers will pay the IRS directly and will not need to send any money to the private debt collection company. Learn about payment options at www.irs.gov/payments. You can also see your balance and payment history online. If the caller asks you to pay them directly, and especially if they ask for an unusual form of payment, such as wire transfer or gift card, it’s a scam. Hang up!
- Taxpayers can ask for their account to be transferred from the private debt collection back to the IRS.
The IRS adds that private collection firms will only be calling about longstanding tax debts notified about previously. Taxpayers can check whether they have unpaid tax debt atwww.irs.gov/balancedue.
BBB reminds consumers, particularly those who have outstanding tax debts, that the IRS will explain the new process clearly and will make every attempt to work with them to set up payment plans. The IRS will also give taxpayers the chance to question or appeal the amount owed.
For more information and updates, visit www.irs.gov/businesses/small-businesses-self-employed/private-debt-collection.