IRS Tax Tip 2019-166, November 26, 2019
Taxpayers in the private debt collection program now have a new option for paying what they owe. Taxpayers now can choose a pre-authorized direct debit. They can use this to make one payment or a series of payments toward their federal tax debt.
These taxpayers should remember to be aware of scammers. Like all taxpayers, they should be on alert for identity thieves pretending to be from a private collection agency calling about a tax bill.
Here are some facts to help people understand this new payment option:
- With direct debit, the taxpayer gives written permission to the private collection agency authorizing payment. The payment is made on the taxpayer's behalf to the U.S. Department of the Treasury. This also allows the taxpayer to schedule multiple payments with one phone call.
- When taxpayers choose the direct debit option, they'll complete and sign a written authorization. They can submit this to the private collection agency by mail or fax. The authorization contains the payment schedule and bank account information.
- Once the collection agency receives the taxpayer's signed authorization, the collection agency will send a confirmation letter to the taxpayer. This letter contains the details of the pre-authorized direct debit.
- After scheduling a direct debit, the taxpayer can change or cancel it up to one business day before the scheduled payment.
Here's some info to help taxpayers make sure the caller is legit:
- Payments by check should be made out to the U.S. Treasury. The taxpayer should send the check directly to the IRS, not the private collection agency.
- When a representative from one of the four private collection agencies contacts a taxpayer, they will tell the taxpayer which private collection agency they represent. It will be one of these: CBE, Performant, Pioneer or ConServe.
- Even with private debt collection, taxpayers will not get unexpected phone calls demanding payment.
- Before a taxpayer is contacted, they will receive two letters. One is from the IRS and one from the private collection agency. Both letters will include a taxpayer authentication number, also known as a TAN.
- The TAN will be used by the taxpayer to authenticate the private collection agency. It's also used by the collection agency to verify the identity of the taxpayer. Taxpayers will use the TAN instead of their Social Security number.
- Taxpayers should safeguard their TAN as they would a Social Security number.