On Tuesday, the IRS (Internal Revenue Service) announced that they are going to use private debt collecting companies to collect old tax debts. A new law that Congress put into effect in December 2015 allows these collectors to try to claim unpaid tax debts that are not presently being worked on by the IRS, and were assessed in years prior.

According to KARE TV and the IRS, here is what you need to know so that you can tell the difference between a real collection attempt and a scam.

  • You will only be contacted if you have a long-outstanding tax debt. If you fit into this category, you have probably been contacted numerous times before by the IRS.
  • You will be contacted by the IRS first. You will receive a notification in the mail and a publication talking about what you can expect to happen as your account is transferred, and you will be given documentation of the amount owed before you will get a call from the collectors.
  • There are only four groups participating in the program: CBE Group of Cedar Falls, Iowa; Conserve of Fairport, N.Y.; Performant of Livermore, Calif.; and Pioneer of Horseheads, N.Y. No other groups are authorized for private collection and you will be assigned to one group. Once you have been assigned to a group, they will contact you by mail confirming it. These companies cannot call you at work or use profane language and they have to call within certain hours, according to the Fair Debt Collection Practices Act.
  • Only send your payments directly to the IRS. Checks can only be made payable to the U.S. Treasury. If a company wants you to do something else, it's a scam.
  • Private collectors can't take enforcement action against you. Only IRS employees can issue a tax lien or levy. The contractors will never:a. Call to demand payment using a specific method.

    b. Threaten to bring in local police or other law enforcement to have you arrested

    c. Demand the tax amount be paid without giving you a chance to appeal or question the amount.

    d. Ask for credit or debit card numbers over the phone.

    You can check if you have unpaid taxes at irs.gov/balancedue.

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