IRS Will Begin Working With Private Debt Collectors This Month

Image courtesy of Adam Fagen

The Internal Revenue Service has released additional details about its new program that turns certain delinquent accounts over to private debt collectors, giving us some idea of when these collection calls will begin, and how many accounts will be affected.

Today, the IRS confirmed that it will send out its first notices — alerting affected taxpayers that their overdue accounts have been transferred — this month.

As we previously covered, this notice is the first step in the new process. It will be followed a week later by a second notice sent by the private debt collection firm. Then the firms will place a follow-up call to the taxpayer, during which the collector must authenticate itself to ensure that the firm is acting on the behalf of IRS.

But just how many people can expect to receive these notices and phone calls?

The IRS announced Tuesday that for each of the first four weeks of the program it will transfer 100 accounts to the individual private debt collection firms. That means that 400 accounts will be taken over by the four private firms in the first week, with 1,600 accounts moving in the first four weeks.

After this, the agency plans to move over 1,000 accounts to each collection firm each week. By mid-summer, several thousand accounts will shift to the agencies weekly.

Despite the large number of expected account transfers, the IRS says that the firms will only be handling a small number of overdue accounts.

A rep for the IRS said on a conference call that the agency will evaluate the private firms’ ability to handle the accounts. If the IRS believes that the firm is overwhelmed, it will dial back the number of accounts transferred.

As for gauging the success of a program, the IRS says it is taking things “day by day,” and will evaluate the program by measuring it against costs and the ability of each firm to resolve overdue accounts.

The IRS also reiterated the need for consumers to be vigilant of possible scams related to the use of private debt collectors.

“Here’s a simple rule to keep in mind. You won’t get a call from a private collection firm unless you have unpaid tax debts going back several years and you’ve already heard from the IRS multiple times,” IRS Commissioner John Koskinen said in a statement. “The people included in the private collection program typically already know they have a tax issue. If you get a call from someone saying they’re from one of these groups and you’ve paid your taxes, that’s a sure sign of a scam.”

Consumers unsure if they owe a back tax can check register an account with the IRS at and check their balance.

If the account balance is zero, then nothing is due and you should not receive a call from the IRS or private firms about an overdue tax. If you do, it’s likely a scam.

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