If someone contacts you and tries to get you to pay a tax debt, this could be a scam. Beginning April 2017, the IRS contracted with private collection agencies to try to collect taxes that the IRS has not been able to collect. You might be able to get rid of tax debts in bankruptcy. In the meantime, here are the major tricks that impostor scam artists use when pretending to try to collect tax debt:
- Demanding immediate payment with a prepaid debit card, wire transfer, iTunes card, or gift card;
- Asking for your credit card or debit card numbers over the phone;
- Threatening to have you arrested or otherwise intimidating you for not paying;
- Insisting on payment without giving you the opportunity to question or appeal the amount they claim that you owe; and
- Asking you to pay a collection agency or someone else directly instead of paying the IRS.
If you owe taxes that the IRS has been unable to collect, they will send you a letter informing you that your account has been assigned to a private collection agency, then the agency will send you a letter confirming the assignment. Both of the letters will contain a 10-digit code, and you will receive the letters before the private collection agency contacts you. There are only four of these agencies working with the IRS, so if the call is not from one of the following or if you did not receive both letters before the call, the call is a scam:
- CBE Group;
- Performant Recovery; and
- Pioneer Credit Recovery.
Contact a competent bankruptcy attorney if you have major tax problems. Older tax debts can often be discharged in bankruptcy, and the remainder can be paid in a five-year plan in chapter 13. And whatever you do, don’t fall for a scam!