Tax Insights

Your Guide to State, Local, Federal, Estate + International Taxation

IRS adds new option in private debt collection program

In 2017, the IRS resurrected its private debt collection program. IRS then selected four private debt collection agencies (PCAs) to collect certain outstanding tax debts. The cases assigned to the collection agencies needed to meet certain requirements under federal law for inclusion in the private debt collection program. Through June of 2019, the four PCAs have been given more than 1.9 million total cases that represent more than $16.2 billion of the IRS’s balance-due inventory. To date, the PCAs have assisted more than 163,000 taxpayers who either paid their balances in full or set up a payment arrangement. On October 8th, 2019, IRS announced a new payment option added that PCAs can use to collect tax debts.

Don’t miss: Putting the STATE in estate taxes

Taxpayers now can choose what IRS says is the convenient option of a preauthorized direct debit to make one payment or a series of payments toward their federal tax debt. With direct debit, the taxpayer will give their written permission to the PCA to authorize payment on the taxpayer’s behalf to the U.S. Department of the Treasury. The goal to provide the taxpayer with a secure and convenient method to schedule payments with the ease of a single phone call with their assigned PCA.

The new direct debit option supplements existing IRS-sponsored payment options and can be changed or canceled up to one business day prior to the scheduled payment. Taxpayers can still opt to use the electronic payment options available on IRS.gov/Paying Your Taxes. Payments by check should be payable to the U.S. Treasury and sent directly to the IRS, not the PCA.

 

Dale F. Jensen, CPA

Get in on the conversation.

Unfortunately, we cannot give free advice to non-clients by email, comment response, or phone call. Thank you! Read our disclaimer.