BBB Warns Of Potential Scam With New IRS Program

April 22, 2017 (STL.News) The Better Business Bureau of St. Louis is warning taxpayers of a possible IRS scam.

Under a new program, the IRS will begin sending letters to a relatively small group of taxpayers whose overdue federal tax accounts are being assigned to one of four private-sector collection agencies.  The BBB is concerned that this may result in an opportunity for con artists.

“Scammers might use this program as a cover to trick people into sending money,” said Michelle Corey, BBB president and CEO.

The BBB predicts that scammers could contact taxpayer by phone and pose as one of these collection agencies.

The BBB says these collection agencies for the IRS will never call and demand immediate payment over the phone.

The new program which is authorized under a federal law, was enacted by Congress in December 2015.  It enables these designated contractors to collect unpaid tax debts on the government’s behalf.

The four private groups participating in this program are CBE Group of Cedar Falls, Iowa, Conserve of Fairport, N.Y, Performant of Livermore, California, and Pioneer of Horseheads, N.Y.  The taxpayer’s account will only be assigned to one of these agencies, never to all four.  No other private group is authorized to represent the IRS.

“The consumers 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.” Corey said.

Taxpayers who are unsure if they have an unpaid tax debt from a previous year, which is what the private collection firms will handle, they can go to IRS.gov and check their account balance: www.irs.gov/balancedue.

The Better Business Bureau recommends the following tips to avoid scams involving the IRS:

  • The IRS will never call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer.
  • Most people can set up a payment agreement with the IRS online in a matter of minutes. Those who owe $50,000 or less in combined tax, penalties and interest can use the Online Payment Agreement to set up a monthly payment agreement for up to 72 months. Some taxpayers may also qualify for an offer-in-compromise.
  • The private firms are authorized to discuss payment options, including setting up payment agreements with taxpayers. But as with cases assigned to IRS employees, any tax payment must be made, either electronically or by check, to the IRS. A payment should never be sent to the private firm or anyone besides the IRS or the U.S. Treasury. Checks should only be made payable to the United States Treasury. To find out more about available payment options, visit IRS.gov/Payments.
  • Private firms are not authorized to take enforcement actions against taxpayers. Only IRS employees can take these actions, such as filing a notice of Federal Tax Lien or issuing a levy. To learn more about the new private debt collection program, visit the Private Debt Collection page on IRS.gov.