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How to recognize a legitimate IRS bill collector

As when a train comes barelling down the tracks, you'll know to expect that call from the private collection agency long before the phone rings.

If chosen for the Internal Revenue Service private collection program, you'll first receive letters from the IRS and the agency assigned to your account.

Firms contract with the IRS
Only three private collection agencies are currently authorized to collect taxes owed to the IRS.

If all goes well, the IRS expects to contract with up to 10 additional private collection agencies.

Make sure when you're contacted that the agency is one of the contracted agencies.

So far, the three companies are:

What to expect
Here's a breakdown of the collection process and restrictions for the private collection agencies:

  • The IRS will send a letter, along with the IRS publication "What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency." The documents should answer FAQs about the program -- including your right to request that the IRS handle the account, not the debt collector.
  • Following the IRS letter, the assigned private collection agency will send a letter to the taxpayer explaining that the agency will contact him or her about the tax debt owed.
  • Private collection agencies must abide by the rules set in the Fair Debt Collection Practices Act, including these:

  • Debt collectors should not harass taxpayers.
  • Debt collectors may not contact third parties such as employers about the taxpayer's financial situation or continue to contact a third party once they know how to reach a taxpayer directly.
  • Debt collectors should not contact taxpayers before 8 a.m. or after 9 p.m., unless otherwise permitted by the taxpayer.
  • Debt collectors may not threaten enforcement action they cannot take, such as filing a federal tax lien against you.
  • Making payments

  • The PCA will discuss payment options with the taxpayer, including a lump sum or installment plan agreement. Installment plans must meet certain restrictions, including that the taxpayer file all required tax returns.
  • Tax payments should only go to the United States Treasury. The private collection agency should provide the taxpayer with an appropriate mailing address for the payment.
  • Warning signs of a scam
    If you don't receive the proper notification from the IRS, regard random phone calls about federal tax debts with suspicion. Here's what to watch for:

  • You receive a call from a private collection agency, but did not receive any letters first.
  • The private collection agency mentioned by the caller is not one of the three firms currently authorized to collect tax debts -- The CBE Group, the Linebarger Goggan Blair & Sampson LLP or Pioneer Credit Recovery.
  • The caller threatens legal action if you don't make good on your debts. Private collection agencies in the program cannot take enforcement action against you.
  • The caller requests that you make payments to an individual or the private collection agency directly.
  • When in doubt about a caller or letter, contact the IRS directly at (800) 829-1040. For more information about the program, go to the IRS's Web site.

    Source: The Internal Revenue Service's corrections policy
    -- Posted: Aug. 28, 2006
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