IRS Uses Private Debt Collection Companies

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If you owe money to Uncle Sam, listen up. You may soon be getting letters from the Internal Revenue Service and a private debt collector.

It's a move to speed up delinquent payers. For the first time ever, 3 private companies have been hired to help collect federal taxes owed to the IRS.

These are simple, straight-forward cases, in which the taxpayer knows he or she owes, and dosen't dispute the amount.

So starting September 7th, those who haven't paid will first get a letter from the IRS, telling them which collection agency their case has been assigned to. Then they'll get a letter from that debt collector, asking them to get going.

Jean Carl with the IRS says, "These companies are going to be watched very closely by the IRS. They're going to be trained by IRS Programs. They are not allowed to take enforcement action. They cannot threated or intimidate the taxpayer in any way.

Carl says the agency estimates up to $112 Billion could be collected, with the help of these collection agencies. They are CBE Group of Waterloo, Iowa, Linebarger Goggan Blair & Sampson of Austin, Texas, and Pioneer Credit Recovery of Arcade, New York.

Carl says the companies will not handle the money. They'll just make payment arrangements, whether it's a one-time payment of partial payments, which can span up to 5 years. Checks should only be made out to the U.S. Treasury. And if collectors are able to rein in accounts, they'll make up to 24% on each one.

Crooks may try to impersonate these debt collectors, but Carl says if folks have any doubts, don't give out any personal information. Go straight to the source and call the IRS.

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