The IRS announced today that it will begin later this month sending letters to some taxpayers with overdue tax accounts, informing them that their accounts are being turned over to a private collection agency.
The program involving private collection agencies or PCA’s was approved by Congress in December 2015.
The IRS will first send a letter to the taxpayer whose account is being turned over to a PCA, informing it of this fact. Then, the PCA will send a letter to the taxpayer, confirming that it has received the taxpayer’s account for collection.
It is important to note that payments on overdue tax debts will still be payable only to the United States Treasury–the PCA should not and cannot ask for or receive a payment made payable to it.
In addition, the PCA will not have the authority to take any type of enforcement action against the taxpayer, such as the filing of a lien or issuing a levy–only the IRS will be able to do that.
Finally, the PCA is supposed to comply with the federal Fair Debt Collection Practices Act and to treat taxpayers with courtesy and to respect the Taxpayer Bill of Rights that govern interactions between the IRS and taxpayers.
Although only several hundred taxpayers are expected to have their cases turned over to PCAs this week, the IRS intends to ramp up this program so that thousands of taxpayers per week will see their cases assigned to PCAs later this spring and summer.