Last year, CNBC reported that in the three years prior, 1.2 million individuals received phone calls from people purporting to be the IRS, demanding immediate payment… or else! More than 6,000 of these individuals fell victim to the scheme, sending a combined $36.5 million to scammers. The fact that so many perceive the IRS to be the most intimidating sector of government serves to enable these types of frauds.

What to expect from IRS Collection

The IRS often posts warnings in an effort to thwart some of these schemes. Taxpayers can be sure that:

  • The IRS will never use email, text messages, or social media to discuss personal tax issues.
  • The IRS will never call to demand immediate payment without a right to appeal.
  • The IRS will never ask for payment to be made to anyone other than the United States Department of the Treasury or through the online portal at irs.gov/pay.
  • The IRS will never call and threaten lawsuits, imprisonment, local police involvement, or to contact other government agencies.
  • The IRS will never threaten to revoke your driver’s license, business license, or immigration status.
  • The IRS will never ask for credit/debit card information over the phone.
  • IRS agents may show up at your home or business. If they do, you have a right to see their government-issued identification.

IRS Collection Standards

In late 2015, a provision of the Fixing America’s Surface Transportation (FAST) Act allowed the IRS to turn over some of its collection activities to private collection agencies. The accounts turned over to collections will not involve accounts of taxpayers who are deceased; under age 18; in designated combat zones; victims of tax-related identity theft; currently under examination, litigation, criminal investigation, or levy; subject to pending or active offers in compromise; subject to installment agreement; subject to right of appeal, classified as an innocent spouse case, or in a presidentially declared disaster area and requesting relief from collection.

While these private entities work with more relaxed guidelines than those followed by the IRS, they are bound by certain rules:

  • They must always abide by the consumer protection provisions of the Fair Debt Collection Practices Act.
  • They will never ask for payment to be made to any third party. Taxpayers will be directed to make payments at irs.gov/pay or by sending a check written to The United States Treasury.
  • They will never ask you to submit payment over the phone.

The IRS Collection and Private Debt Collectors

The IRS will notify the taxpayer, in writing, before their account is turned over to a private debt collector. This will be followed by a letter from the private debt collector to the taxpayer to inform them that they are now attempting to collect the debt on behalf of the IRS before collection efforts begin.

Reporting Fraud in Collections

If you suspect that someone other than the IRS (or their authorized agent) is contacting you, you are urged to call the Treasury Inspector General for Tax Administration (TIGTA) hotline at 800-366-4484.

If you are dealing with the IRS or an authorized private collection agency, you have a right to professional representation. If you are the subject of collection procedures, Abacus CPAs can provide expert guidance to restore peace of mind, confidence, and bring a final resolution.

At Abacus™ CPAs, our focus is you! We believe that our employees and clients deserve to interact in an environment that fosters growth, trust, and confidence. Abacus™ professionals provide leadership by relentlessly pursuing the best guidance possible so those we serve can make smarter decisions.