Private Collection Agencies & IRS Debt

Private Collection Agencies & IRS Debt

If you owe tax debt and are contacted by a private collection agency (such as CBE Group), the IRS has referred your account to an external agency to recover unpaid taxes. Here's what you need to know and how the process works.

Understanding the Process:

When it comes to IRS tax debt relief, your case may be handed off to a private collection agency like CBE Group. Here's what happens:

• The IRS collections process refers the long-standing, inactive debts to these agencies after the IRS's own efforts have been unsuccessful.


• When dealing with these agencies, it's essential to understand your taxpayer rights under the Fair Debt Collection Practices Act (FDCPA).

Suppose you're considering options like IRS payment plans or an Offer in Compromise. In that case, it's essential to verify the agency's legitimacy. For example:

• An IRS Notice CP40 informs you that your debt has been transferred to a private collection agency, meaning the IRS will no longer handle your case directly.

Why You Need to Contact the Private Collection Agency:

Once your tax debt is assigned to a private collection agency, it's essential to work directly with them because:

• The IRS will no longer manage your case after the referral.


• Any resolution, including installment agreements or full payment, must be handled through the private collection agency.


• The IRS will only step in if you dispute the debt or have questions about the agency's legitimacy.

Steps to Take:

1.Verify the Debt:

• Once you receive the IRS notice (CP40), confirm it's legitimate by checking your IRS account or contacting the private collection agency with the taxpayer authentication number included in the notice.

1.Contact the Private Collection Agency:

• The IRS will no longer handle your case after the referral, so contact a private collection agency (such as CBE Group) to set up a payment plan or pay off the debt.

1.Make Payments:

• All payments must go to the IRS, not the private collection agency. Payments can be made electronically or by check and payable to the U.S. Treasury.


• Warning: If the agency asks for direct payment to them, it's likely a scam.

1.Know Your Rights:

• The private collection agency must follow the FDCPA, which prohibits aggressive tactics and harassment. Report any violations to the IRS immediately.

Helpful Links to Verify Information:

• IRS Private Debt Collection Program: Detailed information on how the IRS uses private collection agencies to recover unpaid taxes.   http://IRS Private Debt Collection




• IRS Taxpayer Account Verification: Check your IRS account balance and confirm if your debt has been referred to a private collection agency.  Check Your IRS Account

• IRS Publication 4518: A brochure outlining what to expect when your account is assigned to a private collection agency. http://IRS Publication 4518

• CFPB Debt Collection FAQs: Know your rights under the FDCPA and avoid scams.  http://CFPB Debt Collection