The IRS works with private collection agencies that work with taxpayers who have overdue tax bills. These agencies help taxpayers settle their tax debts. This page contains frequently asked questions about the program.
Congress passed a law requiring us to use private collection agencies (PCA). These agencies assist us in collecting certain overdue tax accounts.
We placed your account with a PCA for collection of your unpaid tax liability because you met one of the following criteria:
- We lacked the resources or couldn’t locate you
- A year has passed and you or your third-party representative haven’t interacted with us on your account
- One-third of the collection statute has lapsed and was not assigned for collection
We would not have assigned your account to a private collection agency if you are:
- Under 18 years of age
- In a designated combat zone
- The victim of tax-related identity theft
- Currently under examination, litigation, criminal investigation, or levy
- Subject to pending or active offers in compromise
- Subject to an installment agreement
- Subject to a right of appeal
- Classified as an innocent spouse case
- In a presidentially declared disaster requesting relief from collection
We also won’t assign the accounts of the deceased to private collection agencies.
A private collection agency will:
- Send an initial contact letter before attempting to collect
- Identify themselves as IRS contractors who are collection taxes
- Set up and monitor payment arrangements that will allow you to pay in full within five years or the collection expiration date
- Secure IRS approval for payment arrangements that are longer than five years, but will allow you to pay in full within seven years or the collection expiration date
A private collection agency will not:
- Request a payment made directly to them or on prepaid debit, iTunes or gift cards
- Collect financial information
- Take any type of enforcement action such as issuing a levy or Notice of Federal Tax Lien
- Make determinations to accept or reject offers in compromise or report accounts currently not collectible
- Charge a fee for setting up a payment agreement
The IRS will send you a letter before you are contacted by a private collection agency (PCA). This letter is called a Notice CP40 (PDF). It verifies that your case was transferred to a PCA.
You can also request a copy of your account transcript through our Get Transcript tool to verify that we assigned your account to a PCA. The transcript will contain the following:
|971||Collection referred to a private
debt collection agency
|971||Notice issued CP 0040||08-07-2017||$0.00|
After we send you the Notice CP40, the PCA will send you a letter confirming assignment of your unpaid tax liability. The PCA will not contact you by telephone before sending you the confirmation. After they send that letter, the PCA will call you to help you resolve your account. They will explain the payment options and help you choose one that is best for you.
Before you receive a phone call, both the IRS and the private collection agency (PCA) will send you a letter. The IRS Notice CP40 and the PCA’s initial letter contain a Taxpayer Authentication Number. The PCA uses this number to verify your identity and you can use the number to confirm the PCA’s identity. Keep both letters in a safe place for future reference.
For additional information, you can also view the IRS video Private Collection of Overdue Taxes.
Work with the PCA to determine why your payment wasn’t applied to your account. Provide the payment information the employee requests. We use the information you provide to make sure your payment is properly credited.
Make all payments to the IRS. The PCA will never ask you to pay them directly or through prepaid debit, iTunes or gift cards. The private collection agency can provide information on ways to pay or you can visit Payments for electronic payment options. You can also see Publication 594, The IRS Collection Process (PDF), for ways to pay your taxes.
Payment options include:
- IRS Direct Pay to pay an individual tax bill directly from a checking or savings account at no cost
- Electronic Federal Tax Payment System to pay federal taxes online or by phone for free
- Debit or credit card using an electronic payment service provider for a fee
- Check or money order, made payable to the United States Treasury. Write your name, Social Security number, and tax year on your payment
- Preauthorized Direct Debit, a convenient and secure option that requires your written permission to authorize the PCA to draft a check, or a series of checks, on your behalf. The checks are always made payable to the United States Treasury and can be changed or canceled up to one business day prior to the scheduled payment. Ask your PCA how you can authorize the direct debit option to conveniently and securely schedule one or multiple payments.
Private collection agencies cannot take any type of enforcement action against you to collect your debt. However, the IRS does have the legal authority to file a Notice of Federal Tax Lien or issue a levy to collect an overdue account.
If you do not wish to work with your assigned private collection agency to settle your overdue tax account, you must submit this request in writing to the PCA.
You can get help from individuals and organizations that are independent from the IRS. Publication 4134 (PDF), Low Income Taxpayer Clinic List (PDF) provides a listing of Low-Income Taxpayer Clinics. Help is also available from:
- Taxpayer Advocate website
- Directory of Federal Tax Return Preparers with credentials recognized by the IRS
- A referral system operated by a state bar association, a state or local society of accountants or enrolled agents or another nonprofit tax professional organization
Note: The decision to obtain assistance from any of these organizations or individuals will not result in the IRS giving preferential treatment in the handling of the issue, dispute or problem.