IRS starts referrals to private debt collectors this week

posted at 5:01 pm on April 4, 2017 by John Sexton

Starting this week the IRS will turn delinquent taxpayers over to one of four private debt collection companies which have been pre-selected by the agency. The use of private collections agencies was part of a bill passed in December 2015. The IRS will begin with 100 referrals to each of the four collection companies per week and will ramp up to 1,000 referrals per week.

This change in procedure comes at a time when scammers pretending to be IRS agents have already made calls to millions of Americans. The Associated Press reports scammers have stolen more than $50 million from Americans who are convinced they are getting calls from legitimate government agents:

Since fall 2013, more than 1.9 million people have received unsolicited telephone calls from fake government agents, according to the inspector general for tax administration. The callers demand money, saying the victim owes unpaid taxes. To date, over 10,300 victims have paid more than $55 million to the criminals.

The IRS has said the scam is so widespread that multiple criminal organizations are taking part.

Last October the Department of Justice announced charges against 61 people involved in scams being run from India:

Callers working off scripts and posing as officials with the Internal Revenue Service and U.S. Immigration and Customs Enforcement would tell unsuspecting victims that they had failed to pay taxes they owed or were at risk of deportation, and that a fast payment was needed to get out of trouble.

Data brokers arranged the purchase of names and personal information of potential targets. “Runners” in the U.S. were responsible for getting scammed funds into bank accounts, a laundering process aided through wire transfers and prepaid debit cards. And payment processors based in India helped facilitate overseas payments.

All of this is why the IRS web page about the shift to private collection devotes a lot of space to avoiding scam artists. It reads in part, “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.”

The four companies the IRS has selected to handle collections are CBE, ConServe, Performant and Pioneer. But given that this information is public knowledge, it seems likely the scammers will simply incorporate it into their scripts and continue stealing. One way to tell if you’re talking to a real collection agency or a scammer: All checks for back taxes are written directly to the IRS. So if someone claiming to be from one of these companies asks for a check made out to anyone else, something is wrong.


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