2015’s passing of the FAST Act reauthorized the IRS to use third-party debt collectors. However, this reintroduction comes after several previous stints of IRS enlisting the help of private collectors.
In both 1996-1997 and 2006-2009, the U.S. Internal Revenue Service called on private debt collectors to help track down taxpayers with unresolved federal debts. However, each of these attempts to outsource collections functions resulted in failure, yielding fewer collections than initially projected, wasting money, and contributing to large-scale inequities in the U.S. tax collection system.
Congress passed Fixing America’s Surface Transportation Act (FAST Act) in December of 2015. Though the bill was technically a highway bill, the FAST Act included a debt-collection section that essentially granted the IRS the ability to once again use private debt collectors for recouping outstanding tax debts from citizens. Since the passing of the FAST Act, the IRS has since hired a total of four private debt collection agencies: ConServe, Performant Recovery, CBE Group, and Pioneer.
Thus far, reports have shown that in 2019 alone, the IRS was able to collect nearly $213 million in debt through use of their contracted collection agencies. This marked the largest amount of money recovered since the program’s 2015 inception.
Which Private Collection Agencies Are Contracted by the IRS?
As of 2020, the IRS currently contracts the four following private collection agencies:
P.O. Box 2217
Waterloo, IA 50704
P.O. Box 307
Fairport, NY 14450
P.O. Box 9045
Pleasanton, CA 94566
PO Box 500
Horseheads, NY 14845
What Types of Tax Debts do IRS Private Collectors Handle?
As mentioned before, IRS-contracted private debt collectors are only allowed to collect on certain types of federal tax debts. According to IRS Commissioner John Koskinen, “you won’t get a call from a private collection firm unless you have unpaid tax debts going back several years and you’ve already heard from the IRS multiple times.”
There are a number of ineligible back taxes that IRS-contracted collectors are not authorized to requisition, including:
Accounts with an Offer in Compromise agreement
Accounts with an IRS installment agreement
Innocent Spouse cases
Victims of tax-related identity theft
Accounts for minors
Accounts for the deceased
Taxpayers in designated combat zones
Taxpayers in federally-declared disaster areas who have requested relief
If you fail to pay your taxes, the IRS can even lay claim to your personal assets to satisfy your repayments with a tax lien. In this case, you can file IRS Form 12153 to appeal the decision.
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