The IRS will begin using four private debt collection firms to recover unpaid taxes, but only after multiple written communications over the course of several years.
For years, industry experts have warned the public about the clear signs of a suspected IRS scam. These include red flags like blocked phone numbers, people who ask for your personal information and account credentials for “verification” purposes, and “officials” who say you must pay immediately via wire transfer or even prepaid gift cards.
This program is important because it could “undo” more of the safety precautions when it comes to avoiding scams and fraud. For quite some time, taxpayers have been warned about IRS scams in which a caller claims you owe an outstanding debt for unpaid taxes. Countless victims have fallen for these scams, and consumer advocates work very hard to spread the word: you do NOT have to pay money to someone who calls you or emails you, and the IRS will never call to inform you of unpaid tax debt.
However, the IRS is now going to work with four private debt collection firms to recover funds from chronically overdue taxpayers. What does this mean for most citizens? Absolutely nothing! The IRS will still inform you in writing first that you owe money, and in fact, they will make several attempts to resolve the matter before resorting to collections. They actually anticipate that years of back taxes will accrue before anyone is turned over to the private firm.
According to the agency’s own statement by Commissioner John Koskinen, “The IRS is taking steps throughout this effort to ensure that the private collection firms work responsibly and respect taxpayer rights. The IRS also urges taxpayers to be on the lookout for scammers who might use this program as a cover to trick people. In reality, those taxpayers whose accounts are assigned as part of the private collection effort know they have a tax debt.”
According to the alert, if taxpayers are unsure if they have an unpaid tax debt from a previous year – which is what the private collection firms will handle – they can go to IRS.gov and check their account balance: www.irs.gov/balancedue
Key points to remember about this change:
- This is only for specific taxpayers who’ve already been notified, and not the entire public.
- Only four collections firms are authorized to contact overdue taxpayers.
- Payment will still only be made electronically or via check, NOT over the phone via prepaid gift cards or iTunes gift cards.
- Payment must still be made to the IRS, and NOT to the debt collector.
The taxpaying public has to be diligent about scams, now more than ever. This announcement opens the door for scammers who are gleefully rubbing their greedy hands together, ready to convince you that you are one of the people who’ve been turned over to collections. Again, you will have received multiple written notices from the IRS and this issue will date back over several years before you will be required to pay a collections agent; you will also never be required to pay immediately over the phone, even if you’ve been relegated to the private firm for repayment.
If you think you may be a victim of identity theft, contact the Identity Theft Resource Center for toll-free, no-cost assistance at (888) 400-5530. For on-the-go assistance, check out the free ID Theft Help App.