IRS: 3rd Party Collection Agencies

In 2015, Congress charged the Internal Revenue Service with hiring 3rd party collection agencies to collect back taxes from taxpayers. The results have been less than impressive. While a Kaplan Group survey showed that in general, collection agencies are successful in their efforts 17% of the time, the agencies the IRS spent $20 million on were only able to recoup $6.7 million out of $920 million owed. That's less than 1%.

This failure rate may be enough to put the government off outsourcing collection efforts. In the past, various agencies have tried 3rd party collection agencies with similar results. When the programs didn't prove successful-the return on investment was poor-the programs were abandoned. 


Third-Party Tax Collection Could Be Here to Stay

That doesn't mean that the current IRS program will end in a similar fashion. The government has had impressive success collecting on defaulted student loans, getting 80% on the dollar according to a New York Times report. Yet, debt collection companies spent millions on lobbying members of Congress in 2015. That money to members could convince Congress to keep the IRS program going despite the poor performance numbers. 


Hire a Tax Attorney to Help with Back Taxes

Whether these private firms continue collection activites or not, it is in your best interest to consult professional help if you owe a tax debt. The collection agencies may use harassment and other tactics to collect. However, the IRS has tools that a private firm does not. The IRS can garnish your wages, use all or part of any tax refund to pay off the debt, withhold Social Security checks or seize some types of property. Dodging the IRS may prove futile as well, as the government can track you down in ways a private firm cannot. 

With the help of a tax lawyer, you can stop the IRS from seizing property or assets or garnishing wages. An experienced local attorney can stop the IRS from taking large sums of a potential tax refund to pay back taxes. Through working with a tax attorney, you can negotiate with the IRS to reduce taxes owed or work on a payment plan that you can afford. Further, we can help you avoid mistakes that led to your tax problems through sound advice. 


Avoid Collection Agencies By Hiring a Tax Attorney

The IRS' new hands-off approach to collecting back taxes is likely to result in problems for middle-class, low-income and retirement aged taxpayers. Private collection agencies could pursuade ordinary citizens into entering a payment plan that's more than they can afford while earning a nice commission for themselves. We hope that the IRS recommends that Congress abandon the hiring of 3rd parties to collect taxes. However, we recommend that you hire a tax professional to help with back taxes no matter who is doing the collecting. 

IRS problems are unlike other things in life that may just go away on their own. To make matters worse, on-going taxes keep coming at you while you deal with the old taxes. It doesn't have to be this way! Remember you are entitled to representation against the IRS' and third-party collection agencies' tactics and intimidation. You can start the road back to a good night's sleep again! Call Travis W. Watkins Tax Resolution and Accounting Firm for your FREE consultation at 800-721-7054.


Note-Below are the ONLY private collection agencies selected by the IRS:

  • CBE

P.O. Box 2217

Waterloo, IA 507054


  • ConServe

P.O. Box 307

Fairport, NY 14450-0307


  • Performant

P.O. Box 9045 

Pleasanton, CA 94566-9045


  • Pioneer

P.O. Box 500

Horseheads, NY 14845



Are you ready to think more clearly, take positive steps to solve your problems, and find creative ways to deal with the IRS? Download our FREE book, The Ultimate Survival Guide for IRS Problemshere!

Travis Watkins
Senior Tax Attorney
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