In the past, if you received a collection notice from a third party claiming that you owed money to the IRS, you would ignore it, thinking that it’s a scam. While these scams do still occur, more often that you’d expect, the IRS has authorized three private collection agencies to help them get the back taxes that are owed to them. If any of these three companies, CBE Group Inc, Coast Professional, Inc, or ConServe, contacts you, then you more than likely do owe the IRS money.
Want to know more? Here’s what you need to know about these new IRS collection efforts.
CBE Group, Inc.
One of the companies that the IRS has recently contracted with is CBE Group, Inc. This collections agency is based in Iowa, although they have offices located around the country. On top of handling collections for the IRS, CBE Group, Inc also offers payment monitoring and both primary and secondary bad debt collection services. Many of their clients are government organizations (like the IRS), healthcare companies, higher educations organizations, and both utilities and telecommunications businesses.
Coast Professional, Inc.
Based in Geneseo, New York with offices in West Monroe, Louisiana, Coast Professional, Inc is a collections agency that specializes in government and higher education collections. They have a contract with the IRS, as well as with colleges and universities throughout the United States, and also work for the U.S. Department of Education collecting on federal student loans. Coast Professional, Inc is officially licensed and remains in compliance with all statutes and other legal requirements when it comes to collections. This is just one of the reasons why the IRS has made them one of their official collection agencies.
Another collections agency that specializes in government and higher education debt collection efforts, ConServe is based in Fairport, New York. The company also works with the banking and financial industry, as well as a variety of commercial organizations in order to collect funds that are due. The company opened in 1985 and has a track record of success, compliance, and fair and ethical collections efforts. ConServe boasts about their policy of helping consumers by Fostering Financial Freedom and setting up payment plans that they can afford. Their new IRS collections efforts should fall into their category as well, ensuring that those who owe money are treated fairly.
How the Collections Process Will Work
Since the IRS has contracted with outside companies to collect back taxes that are owed to them, they have made a few changes in their main collections process. This not only establishes the debt that is owed, but it also makes it easier for taxpayers to tell a true debt from a scam, something that the IRS is concerned about because these types of scams are still out there. In order to inform the taxpayer about the funds that they owe, the IRS has developed a process.
First, they will send out an official IRS Notice CP40. This notice is on official IRS letterhead, and resembles all of the other notices that they send out, making it clear that it’s from them. The Notice CP40 is designed to inform taxpayers that they owe a debt to the IRS and that it will be collected by a third-party collection agency. They will receive more information from that collection agency shortly, but in the meantime, it explains the actions that the debtor can take.
For example, after received the CP40 notice, the taxpayer can either reach out to the collection agency themselves, or wait until the company contacts them. They can also log onto the IRS web portal to see which year the debt is from and find out more information about it, or seek out the help of a tax professional in order to determine the next steps to take, particularly if they have some previous year tax returns that they have yet to file.
In addition to information about the debt collection agency chosen to handle the collections process, the CP40 notice contains a taxpayer authentication number. This number is private to both you, the IRS, and the collections agency, so don’t share it with anyone else. It was put into place to ensure that the collections agency that contacts you is legitimate and allowed to collect that debt from you on behalf of the IRS. They will use it to verify their authorized status.
On top of the CP40 notice, the IRS will also send out a Publication 4518. This is a brochure entitled “What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency.” This brochure contains plenty of information about these private collection efforts, including a series of frequently asked questions (FAQs) and answers that further explain and clarify the process.
After receiving these notices from the IRS, you will be contacted by the third-party collection agency that has been assigned to your account. They will verify the taxpayer authentication number provided to you by the IRS and then will work with you to set up a payment plan or pay the debt off in full all at once, depending on the amount.
If you have any questions about this private, third-party debt collection process, reaching out a professional tax preparer is your best option, as they can help you navigate the payment plan setup and assist with any additional issues that you may have.
How to Avoid Scams
The IRS is very aware of the fact that there are plenty of scams out there using the name of their organization. In order to prevent these scammers from getting money out of taxpayers and using it for their own purposes, they have developed a number of safety and verification measures that can be used to ensure that the debt collector the taxpayer is speaking to is valid.
- Tax Authentication Numbers – The notices sent out by the IRS that inform the taxpayer of the debt contain this number. Each is unique and known only to the taxpayer, the IRS, and the collections agency assigned to them. When the collections agency calls the taxpayer to set up a payment plan, they will have that number and the taxpayer can ask them for part of it in order to verify their authenticity.
- Verification Questions – In addition to the authentication number, the debt collection agency (which will be one of the three described in this article: ConServe, Coast Professional, Inc, or CBE Group, Inc.) will ask the taxpayer a series of questions in order to verify that they have the right person on the phone.
- Following the Laws – There are many laws surrounding the collection of IRS debts, and they must be followed to the letter. The collection companies that the IRS has chosen to collect their debts need to follow these laws, as taxpayers have rights. If you aren’t aware of what the laws are surrounding IRS debt collection, please speak to a professional tax preparer.
- Remaining Polite – You may be used to collections agencies that use threatening or bullying tactics in order to force you to make a payment on a debt. These agencies were specifically chosen because of their polite methods of collecting debts. If any of their employees yell, scream, threaten, or try to coerce taxpayers into paying their IRS debts, the collection agencies should be reported to the IRS.
All of the bullet points above are methods to use to ensure that the collections agency is legitimate. Keep in mind that there are some IRS debt payment scams out there, such as:
- Claiming The Debt Can Be Settled for Far Less – While the IRS may accept a lump sum in exchange for excusing the rest of the debt, it will not be for the “pennies on the dollar” that these fraudulent companies claim it will be.
- Telephone Payment Scams – The collection agencies authorized by the IRS will be contacting the taxpayers by phone, making this scam something you need to look out for. Always use the authentication number provided by the IRS when speaking with a collection agency by phone. If they do not have your number, then they are not legit. Usually, the scam agencies that demand payment over the phone will be belittling and obtrusive, which is one sign that they are trying to scam taxpayers and shame them into paying money that will end up not going towards their IRS debt.
Contact Us Today
If you owe back taxes and have been contacted by one of these three collection agencies or by the IRS itself and have questions about the process, then reach out to the tax advisors at Enterprise Consultants Group. We can answer your questions, discuss your rights, and provide actionable options. Please contact us online or at (800) 575-9284 today to schedule a free and confidential consultation to see how we can help you.
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