Until recently, it was easy to know if the Internal Revenue Service (IRS) was contacting you—if the contact came by phone, it was a scam. In spring 2017, this litmus test changed, and now the IRS is using collection agencies to contact individuals on old past-due accounts. As a result, consumers will need to be even savvier than before when it comes to detecting a potential scam.
Is It the IRS Calling?
Of all the creditors you might owe money, none strikes as much fear into the heart as the IRS. Scammers have long used this fear to prey on frightened consumers, convincing them to send them money against their better judgment.
Now that the IRS has decided to use private collection agencies to collect old tax debt, it will be even harder to detect a potential con artist posing as the IRS. For as long as the private collection program is in place (the agency discontinued a similar program previously due to ineffectiveness), you should know how to spot the difference between the real collection call and the fake.
Here are the basics.
Before you get a call from a collection agency, you should receive a warning letter from the IRS stating its intent to send your account to collections. Also, only certain agencies have the authority to collect on behalf of the IRS. These agencies are:
- CBE Group (Cedar Falls, IA)
- ConServe (Fairport, NY)
- Performant (Livermore, CA), and
- Pioneer Credit Recovery (Horseheads, NY).
If you’re not sure if the person on the other end of the phone is legitimate, take down their information and verify it with the IRS. You can always call them back later.
(Find out about other ways the IRS can collect from you in How to Stop an IRS Wage Garnishment.)
Collectors Must Follow Certain Rules
The collection agencies hired by the IRS must obey the rules outlined in the Fair Debt Collection Practices Act (FDCPA). The FDCPA limits how collectors can contact you and what they are allowed to say. For instance, collectors cannot:
- call you before 8:00 a.m. or after 9:00 p.m.
- contact you at home or work if you tell them to stop
- call so many times it becomes harassing
- use abusive or threatening language, or
- contact other people to discuss your debt.
Also, you’ll want to watch out for the following:
Threats. The IRS collectors cannot threaten you with jail time or deportation—a favorite tactic of scam artists hoping to scare you into turning over your money. If a collector says it will put you in jail or have you deported unless you pay immediately, you can be certain this is a scam.
The form of payment. Be wary about the type of payment required. Collectors for the IRS aren’t allowed to ask you for payment via gift card or a pre-paid debit card. If the collector and the tax debt are legitimate, you will be asked to write a check to the U.S. Treasury or make a payment electronically through IRS.gov/Pay Your Tax Bill. Your payment shouldn’t be made out to the collector.
The age of the tax. Contact with an IRS collection agency should only happen if the IRS has been trying to collect old tax debt for some time. You should already be familiar with the debt—it shouldn’t come as a surprise. If you have no reason to think you owe the IRS money, a scammer may be targeting you.
(For other helpful information, read Consumer Protection Laws.)
How to Report Problems
If a scam collector contacts you, you can file a complaint online with the Federal Trade Commission, your state attorney general, and the Consumer Financial Protection Bureau (CFPB). You may also contact the CFPB if you have a complaint with one of the IRS’s legitimate collection agencies.
Questions for Your Attorney
- I’m not sure if I owe back taxes—how can I find out?
- What options do I have for settling my debt with the IRS?
- Can a collection agency send the police to arrest me if I can’t pay?