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IRS Use of Private Debt Collection Agencies

June 20, 2017


As required under a federal law enacted by Congress in December 2015, the IRS has begun a new private collection program for certain overdue federal tax debts. Under this program the IRS has contracted with four collection agencies.

The IRS will be sending Notice CP40 to a limited number of taxpayers to notify them that their overdue tax liability has been assigned to a private collection agency. The CP40 includes the name, address and phone number of the private collection agency and an explanation of how that collection agency will work with the taxpayer to resolve the overdue account.

The IRS explains on the Private Debt Collection page of their website the following concerning the use of private debt collection agencies:

  • Several factors contribute to the IRS assigning an account to a private collection agency, including older, overdue tax accounts or lack of resources that prevents the IRS from working these cases.
  • Private collection agencies must follow provisions under the Fair Debt Collection Practices Act and should be courteous and respect taxpayer rights.
  • The IRS will do everything it can to help taxpayers avoid confusion and understand their rights and tax responsibilities, particularly in light of continual phone scams where callers impersonate IRS agents and request immediate payment.
  • Taxpayers will be informed by the private collection agency about electronic payment options for taxpayers on IRS.gov. If the taxpayer wishes to pay by check they will be instructed to make the check payable to the U.S. Treasury and mail it directly to the IRS.

See the following on the IRS website for more information:

  • Understanding Your CP40 Notice
  • Private Debt Collection webpage which includes the following:
    • List of the four private debt collection agencies the IRS selected
    • Accounts the IRS will never assign to a private debt collection agency
    • General information on the program

Recent Tax Updates

2018 Depreciation Changes
October 18, 2018

2018 Tax Law Changes that are Directly Reported on Form 1040
October 3, 2018

IRS Tax Transcripts Changes
September 27, 2018

Revised 2018 Schedule A due to Tax Cuts and Jobs Act Changes to Itemized Deductions
August 29, 2018

2018 Expansion of Preparer Due Diligence Requirements
August 8, 2018

IRS Accepting Renewal Applications for ITINs Expiring at End of 2018
July 25, 2018

Additional Updates
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