TOP DRAWER ARTICLE

Collecting Back Taxes
by
HL Carpenter

Do you owe back taxes to the US government? If so, and if you’re not contesting the amount due, you may be hearing from a private collection agency. That’s because the IRS is taking a new stab at a program that was originally implemented in 1996 and abandoned a year later.

Here’s the skinny:

Back in 2004, Congress passed a tax law permitting the IRS to hire private firms to handle simple collections of delinquent taxes. Now, under a program begun on September 7th, 2006, three private collection agencies (PCAs) are starting their work.

What you need to know. If your account is assigned to a PCA, you’ll receive a notification letter from the IRS telling you the name of the firm. You’ll also receive a letter from the PCA.

CAUTION: Protect yourself from scam artists by dealing only with the PCA listed in the official letter from the IRS.

Note that while you’ll work out payment arrangements with the PCA, all checks you write to settle your account should be made out to the US Treasury. Do not provide PIN numbers, passwords or any secret access information for your credit card, bank or other financial accounts.

In an attempt to allay concerns about privacy, the IRS has certain safety measures in place. For instance, background checks are required on all personnel working for a PCA. In addition, PCA personnel are required to complete a training program, and none of the firms are allowed to hire subcontractors or take enforcement actions such as liens.

If you have doubts about anyone who contacts you regarding the program or the PCA, call the IRS at 800-829-1040.

Originally published September 2006.

Last update: December 30, 2009