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Getting a call about tax debt? It could be legitimate

Do you owe federal taxes from years ago? Under a new federal law, private debt collectors may now come after you.
Do you owe federal taxes from years ago? Under a new federal law, private debt collectors may now come after you. AP

The Internal Revenue Service has changed the way it deals with overdue taxes, and that means third-party collection agencies may now call you on the phone.

Like the IRS, the Better Business Bureau is concerned this change might lead to scammers trying new ways to trick people. The program started this month, and even if you know you don’t owe overdue taxes, it’s important to understand what the changes mean so you can avoid potential scams.

A federal law signed in 2015 lets four contractors collect unpaid tax debts for the government. According to the IRS, these are unpaid tax debts that were assessed several years ago and that the agency is no longer trying to collect directly.

Here are the names, mailing addresses and phone numbers of the four private groups awarded contracts to collect on debt:

▪  CBE, P.O. Box 2217, Waterloo, IA 50704, 1-800-910-5837

▪  ConServe, P.O. Box 307, Fairport, NY 14450-0307, 1-844-853-4875

▪  Performant, P.O. Box 9045, Pleasanton CA 94566-9045, 1-844-807-9367

▪  Pioneer, P.O. Box 500, Horseheads, NY 14845, 1-800-448-3531

There are many ways to tell whether a call you receive about tax debts is legitimate. The IRS says people with overdue taxes will always have received multiple contacts, including letters and phone calls, from the IRS first. The IRS says it will also notify taxpayers before sending their accounts to a private collection agency.

Here’s how you can tell the difference between a legitimate debt collector and a scammer:

▪  You will pay the IRS directly. Private collection agencies will not ask for payment on a prepaid debit card, a practice used by current tax scammers. Instead, taxpayers will be informed about electronic payment options currently located on http://www.irs.gov/Payments.

▪  You still get two letters. The IRS will notify taxpayers of a past-due balance and the pending collection activity with two letters. One will be from the IRS informing the taxpayer that his or her account is being transferred to a private collection agency. The second will be from the designated firm.

▪  They will identify themselves. Private collectors will be able to identify themselves as contractors of the IRS collecting taxes. The collection agency employees must follow the provisions of the Fair Debt Collection Practices Act. They must be courteous and respect taxpayer rights.

▪  Not everyone is affected. Accounts that will not be sent to private collection agencies include taxpayers who are: deceased, under the age of 18, military members in designated combat zones, victims of tax-related identity theft, currently under examination or audit, currently in a payment plan, classified as an innocent spouse, or inside a presidentially declared disaster area.

▪  You can opt out. Consumers who do not wish to work with the assigned private collection agency to settle overdue tax accounts must submit a request in writing to the private agency directly.

The IRS adds that private collection firms will be calling only about tax debts that people have had for years and that they have been contacted about previously. Taxpayers can confirm they have an unpaid tax debt from a previous year by visiting www.irs.gov/balancedue.

BBB reminds all consumers, particularly those who have outstanding tax debts, that the IRS will explain this new process and attempt to work with individuals to set up payment plans. They will also give taxpayers the chance to question or appeal the amount owed. If you are unsure or suspicious of a call, take the time to verify.

Emily Valla, emily.valla@thebbb.org, is the Idaho marketplace director for the Better Business Bureau Northwest. To check a business or report a scam, go to www.bbb.org or call (208) 342-4649.

Shred documents, recycle electronics

A reminder: Saturday, April 15, is the Better Business Bureau’s free shred event. Come to Secure Your ID Day from 10 a.m. to 12 p.m. at the College of Western Idaho’s Micron Building, 5725 E Franklin Road, Nampa.

Bring up to three boxes of papers to shred and old electronics to recycle.

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