Does IRS Use Debt Collectors? Understanding IRS Collections

Does IRS Use Debt Collectors to Collect Back Taxes?

Does IRS use debt collectors? Yes, but only in specific circumstances. In recent years, the IRS has partnered with private collection agencies (PCAs) to recover certain unpaid tax debts. These third-party collectors handle cases that the IRS is no longer actively pursuing—but that doesn’t mean every unpaid tax bill ends up in their hands.

If you’ve received a call or letter from a collection agency claiming to represent the IRS, it’s important to know what’s real, what’s not, and how to respond.

When Does the IRS Use Private Debt Collectors?

The IRS began outsourcing some collection efforts as part of the Fixing America’s Surface Transportation Act (FAST Act). Under this law, the IRS can assign certain types of inactive debts to authorized private agencies.

Who Qualifies for Assignment to a Private Agency

The IRS may transfer your account if:

• Your tax debt is older and inactive
• The IRS hasn’t been in recent contact with you
• The debt is not under audit, appeal, litigation, or criminal investigation

Not sure if your debt qualifies? A free tax case review can help you assess your situation.

What Types of Tax Debt Get Transferred

Only straightforward tax debts—such as balances due from filed returns—can be sent to private collection agencies. Debts tied to complex disputes or identity theft are excluded. To understand if your account may be eligible, visit our IRS debt relief page for more details.

How to Know If a Debt Collector Is Legitimate

Before any collection agency contacts you, the IRS will always notify you in writing.

The IRS Will Notify You in Writing First

You’ll first receive IRS Letter CP40, which states that your account is being transferred. You’ll also receive a separate letter from the private agency introducing itself.

Confirming the Identity of a Collection Agency

As of 2023, the four private agencies authorized by the IRS are:

1. CBE Group
2. ConServe
3. Performant Recovery
4. Coast Professional, Inc.

If the agency contacting you isn’t on this list, it’s likely a scam.

Red Flags That Signal a Scam

Be cautious of:

• Demands for payment via gift cards or cryptocurrency
• Threats of arrest or deportation
• Calls that don’t match your IRS letters

Legitimate collectors will never demand immediate payment or threaten you with legal action.

What Rights Do You Have When Dealing with Collectors?

Just because a collector is calling doesn’t mean you’ve lost your rights. In fact, private tax debt collectors must follow strict laws.

FDCPA Protections

All IRS-contracted collectors must follow the Fair Debt Collection Practices Act (FDCPA). This means:

• No calls before 8 AM or after 9 PM
• No threats, intimidation, or harassment
• You can dispute the debt in writing

You Can Request Direct IRS Contact

At any time, you may ask to stop working with the collection agency and deal directly with the IRS instead. You must make this request in writing. For guidance, see our legal help for tax issues resource.

What Private Collectors Can and Cannot Do

Understanding what these agencies are allowed to do helps you stay protected.

They Can Request Payment, But Not Enforce It

Collectors can:

• Call you
• Send letters
• Offer payment plans

They cannot:

• Garnish your wages
• Seize your assets
• Issue levies or liens

Only the IRS has the legal authority to enforce collections.

No Authority to Threaten or Arrest You

Private debt collectors are prohibited from:

• Making threats
• Claiming legal power
• Misleading you about their role

If someone does this, it’s a scam and should be reported.

How to Respond to a Collection Notice Safely

If you’re contacted by a private collector:

• Log in to your IRS account to verify your balance.
• Read all letters carefully—don’t ignore notices.
• Call the IRS directly if something feels off.

Avoid giving out Social Security numbers or banking details to unverified callers.

Does IRS Use Debt Collectors? Know Your Rights and Options

Yes, the IRS uses debt collectors—but only for select accounts. If your case has been assigned to one, don’t panic. You’re still protected under federal law, and you have the right to request direct contact with the IRS at any time.

Need Help Navigating IRS Collections? Talk to a Tax Expert

IRS collection notices can be stressful, but you don’t have to face them alone. Tax Debt Lawyer connects you with licensed professionals who understand how IRS collections and private agency contacts work. Get support, verify your status, and take control of your tax debt today.

Frequently Asked Questions