Conclusiones clave
The IRS uses private collection agencies to recover certain overdue tax debts. Taxpayers receive official written notification before an agency contacts them.
Private debt collectors have limited authority. They cannot garnish wages, levy bank accounts, file federal tax liens, or approve tax settlements.
You have rights and options. You can verify a collector’s identity, request that your account be returned to the IRS, and explore available tax relief programs if you cannot afford to pay.
Why Does The IRS Use Private Collection Agencies?
The IRS has experimented with outsourcing tax debt collection for decades. Earlier programs operated during the 1990s and from 2006 to 2009, but concerns about costs, effectiveness, and taxpayer protections ultimately led to their discontinuation.
In 2015, Congress passed the Fixing America’s Surface Transportation Act (FAST Act), which required the IRS to use private collection agencies to pursue certain inactive tax debts. The current program officially began collecting overdue taxes in April 2017.
Under the program, the IRS assigns eligible accounts to approved private collection agencies. These companies contact taxpayers, explain their outstanding balances, and help establish qualifying payment arrangements.
However, private collectors do not replace the IRS or have the same enforcement authority as federal tax officials.
Additional Protections for Taxpayers
In 2019, Congress passed the Ley del Contribuyente Primero, which expanded protections for taxpayers whose accounts might otherwise be assigned to private collectors.
One significant change prevents the IRS from assigning accounts belonging to taxpayers whose adjusted gross income does not exceed 200% of the applicable federal poverty level. Certain recipients of Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) are also excluded.
The law also strengthened other safeguards, including rules involving older tax debts and payment arrangements. Eligible taxpayers may be able to establish arrangements extending up to seven years, provided the balance is paid before the IRS’s collection period expires.
These protections help reduce the risk of financially vulnerable taxpayers being pressured into payment arrangements they cannot reasonably afford.
How Much Have Private Collection Agencies Collected?
The IRS Private Debt Collection program has generated significant revenue since its relaunch.
De acuerdo con el Congressional Research Service, the IRS assigned approximately 4 million delinquent accounts totaling $36.8 billion in unpaid taxes to private collection agencies between fiscal years 2017 and 2021. During that period, the agencies helped collect more than $1 billion in commissionable payments and another $68.7 million in non-commissionable payments.
The program continued operating through 2025. According to the IRS FY 2025 Agency Financial Report, private debt collection generated $157 million in exchange revenue during fiscal year 2025. Of that amount, $80 million was returned to the government’s general tax receipt accounts, leaving $77 million in net exchange revenue.
Despite these collections, the program remains controversial. Critics have questioned its cost-effectiveness and whether assigning financially struggling taxpayers to private collectors produces better results than direct IRS collection efforts.
What Happens If The IRS Sends Your Account to Collections?
The IRS does not automatically transfer every overdue tax account to a private collection agency. Instead, the program generally focuses on certain inactive tax receivables that the IRS is not actively pursuing.
An account may qualify for assignment when:
- The IRS lacks sufficient resources to pursue collection or cannot locate the taxpayer.
- More than one year has passed without interaction between the IRS and the taxpayer or their authorized representative.
- More than two years have passed since the tax was assessed, and the account has not been assigned for active collection.
If your account is assigned to a PCA, the IRS will first mail you Aviso CP40, informing you of the transfer and identifying the collection agency.
The agency will then send its own letter confirming the assignment before contacting you by telephone. Both letters contain a taxpayer authentication number used to verify the legitimacy of the collection attempt.
Once contact is established, the agency may discuss your outstanding balance and help arrange payments to the IRS.
What Can Private IRS Debt Collectors Actually Do?
Although private collection agencies can contact taxpayers and discuss repayment options, their authority is considerably more limited than that of the IRS.
| Collection Activity | IRS | PCA |
| Contact taxpayers about unpaid taxes | Sí | Sí |
| Discuss qualifying payment arrangements | Sí | Sí |
| File federal tax liens | Sí | No |
| Levy bank accounts | Sí | No |
| Garnish wages | Sí | No |
| Approve Offers in Compromise | Sí | No |
| Determine Currently Not Collectible status | Sí | No |
| Receive tax payments directly | Sí | No |
Private collection agencies cannot seize your property, initiate wage garnishments, or independently negotiate a reduction in your tax debt.
However, the IRS retains its legal collection authority. If your account returns to the IRS and remains unresolved, the agency may pursue additional collection actions when legally permitted.
Which Taxpayers Are Excluded From Private Debt Collection?
Not all taxpayers with overdue balances are eligible for assignment to private collection agencies.
The IRS generally excludes accounts involving:
- Taxpayers who are deceased or younger than 18
- Individuals serving in designated combat zones
- Víctimas de robo de identidad relacionado con los impuestos
- Recipients of SSI or SSDI benefits
- Taxpayers whose adjusted gross income does not exceed 200% of the applicable federal poverty level
- Accounts subject to active installment agreements or pending or active Offers in Compromise
- Cases involving innocent spouse relief, certain appeals, examinations, litigation, criminal investigations, or active levies
- Taxpayers in federally declared disaster areas who have requested collection relief
If you believe your account was assigned incorrectly, contact the IRS to review your circumstances and determine whether your case should be returned.
Beware of IRS Debt Collection Scams
Scammers frequently impersonate IRS employees and private collection agencies to trick taxpayers into providing sensitive information or making fraudulent payments.
Tax-related fraud remains a significant concern. According to the IRS Criminal Investigation FY 2025 Annual Report, investigators identified approximately $4.5 billion in tax fraud during fiscal year 2025, an increase of 111.8% over the previous fiscal year.
Although these figures encompass a broad range of tax-related crimes, they underscore the importance of protecting your personal and financial information. Legitimate private collection agencies must identify themselves as IRS contractors. They are also required to follow federal debt collection rules and respect taxpayer rights.
Which Private Collection Agencies Work With the IRS?
As of 2026, the IRS identifies three authorized private collection agencies:
| Grupo CBE Inc. Apartado postal 2217 Waterloo, IA 50704 800-910-5837 | Costa profesional, inc. Apartado postal 425 Geneseo, Nueva York 14454 888-928-0510 | Conservar Apartado postal 307 Fairport, Nueva York 14450 844-853-4875 |
You can confirm the current list of authorized agencies on the IRS Private Debt Collection website.
Warning Signs of an IRS Collection Scam
Watch out for these warning signs if someone contacts you about unpaid IRS taxes:
- Demands immediate payment through gift cards, cryptocurrency, or prepaid debit cards.
- Requests that you send money directly to the collection agency.
- Threatens immediate arrest, deportation, or other unlawful consequences.
- Refuses to provide information that allows you to verify their identity.
- Contacts you unexpectedly without the required written notices.
- Pressures you to disclose sensitive financial information before you can verify the collection attempt.
If you receive a suspicious call, hang up. Do not provide personal information or make payments until you have independently verified the collection agency.
You can review your account through IRS.gov or contact the IRS directly for assistance.
4 Ways to Protect Yourself When Dealing With IRS Collection Agencies
Whether you’re contacted by the IRS or an authorized private collector, taking the right steps can help protect your rights and prevent additional problems.
1. Understand How the IRS Collection Process Works
The IRS generally begins collecting unpaid taxes by mailing notices explaining your outstanding balance and available payment options.
If your account is assigned to a private collection agency, the IRS will send Notice CP40 before the agency contacts you.
Keep all correspondence and review it carefully. The letters contain important information about your account, including the assigned agency’s name and the taxpayer authentication number.
You can also access your Cuenta en línea del IRS to review balances, payment activity, and other account information.
If you have moved recently, make sure the IRS has your current mailing address so you don’t miss important notices.
2. Never Pay a Private Collection Agency Directly
One of the most important rules of the IRS Private Debt Collection program is that payments must go to the IRS, not the collection agency.
Authorized PCAs can explain payment options and help establish qualifying arrangements, but they cannot demand that you send money directly to their business.
Payments should be made through approved IRS payment methods, such as:
- IRS Direct Pay or other authorized electronic payment services
- An approved payment arrangement
- A check or money order payable to the United States Treasury and sent to the IRS
You may also be able to authorize a qualifying direct debit arrangement through your assigned collection agency, with payments still made to the U.S. Treasury.
Always confirm payment instructions before sending money.
3. Know Your Rights as a Taxpayer
You are not required to continue working with a private collection agency if you prefer to address your tax debt directly with the IRS.
You can submit a written request asking the PCA to stop contacting you and return your account to the IRS.
However, requesting the transfer does not eliminate your outstanding balance or prevent the IRS from taking future collection action.
You also have the right to be treated professionally, receive accurate information, and pursue applicable tax relief options.
If you believe a collector has violated your rights, you can report the incident through the appropriate IRS or Treasury Inspector General for Tax Administration channels.
4. Explore Tax Relief Options With a Qualified Professional
If you’re struggling to pay your outstanding balance, you may have more options than you realize.
Depending on your circumstances, potential IRS tax relief solutions may include:
- los planes de pago del IRS: Allow eligible taxpayers to pay their outstanding balance over time.
- Offers in Compromise: May allow qualifying taxpayers to settle their tax debt for less than the full amount owed.
- Estado de Individuo no cobrable: May temporarily suspend IRS collection efforts when paying would create financial hardship.
- Reducción de multa: May reduce or remove certain IRS penalties when taxpayers meet the applicable requirements.
Private collection agencies cannot approve Offers in Compromise or determine Currently Not Collectible status. These matters must be handled through the IRS.
Working with a qualified tax professional, such as an enrolled agent, CPA, or tax attorney, can help you understand your options and develop an appropriate strategy for addressing unpaid taxes.
Preguntas frecuentes
Take Control of Your IRS Tax Debt
Receiving a notice from a private collection agency doesn’t mean you’ve run out of options. Although these agencies are authorized to collect certain overdue taxes on behalf of the IRS, they must follow federal rules and respect your rights as a taxpayer. The most important steps are to verify any collection notice, understand your payment options, and address your tax debt before the situation becomes more complicated.
If you’re unsure how to handle an IRS collection notice or are struggling with unpaid taxes, Tax Defense Network can help. Our experienced tax professionals can review your situation, explain potential tax relief options, and help you work toward a resolution. Llama 855-476-6920 for a free consultation and take the first step toward putting your tax problems behind you.