You may have some friends who mentioned that they have some old tax debts that the IRS has not tried to collect for some time.

That was probably true once but not any longer, because private collection of tax debts is back.

As part of the Fixing America’s Surface Transportation (FAST) Act, lawmakers wrote a provision that requires the IRS to outsource inactive tax receivables to private collection agencies.

About nine months ago, the IRS announced it had contracted with four private collection agencies to operate the program:

  • CBE Group in Cedar Falls, Iowa
  • Conserve in Fairport, N.Y,
  • Performant in Livermore, Calif.
  • Pioneer in Horseheads, N.Y.

And then a little over two months ago, the IRS released new Internal Revenue Manual sections putting in place the procedures for this new program.

This means that your friends could now receive a Notice CP40 telling them that the IRS assigned their case to a private collection agency.