News and Analysis
A Private Agency Is Calling About Your IRS Debt. Is It Real?
The IRS hands some overdue accounts to private collection agencies. The call can be legitimate, and it can also be a scammer who knows the program exists. Here is how to tell the difference, what a private collector can and cannot do, and how to deal with the balance underneath it.
The short version. The law requires the IRS to assign certain old, inactive tax debts to private collection agencies. Only three are authorized: CBE Group, Coast Professional, and ConServe. A real assignment always starts with mail, not a phone call. The IRS sends you Notice CP40 first, then the agency sends its own letter, and both carry a shared taxpayer authentication number you use to confirm the caller is real. A private collector cannot levy your wages, file a lien, or seize your property. Only the IRS can do those. The phone call is not the problem to solve. The debt behind it is.
Why a private company is calling about a federal tax debt
Congress, not the IRS, set this up. A federal law requires the IRS to turn certain overdue accounts over to private agencies for collection once those accounts have gone inactive, meaning the IRS has stopped actively working them. So a private company calling about an IRS balance is a real part of the system. The trouble is that scammers know it is real, which is why the program is a favorite cover story for fraud.
Three agencies are authorized to do this work, and no others. As of the current IRS roster, they are CBE Group, Coast Professional, and ConServe. If a caller claims to collect IRS debt under any other company name, that alone is reason to stop and verify.
How a real assignment reaches you
A legitimate private collection case follows a fixed order. You get two letters before anyone calls.
- First, the IRS sends Notice CP40. This tells you your overdue account was assigned to a private collection agency and names which one.
- Then the agency sends its own initial letter. It explains how to resolve the balance and confirms the assignment.
Both letters contain the same taxpayer authentication number. That number is the key to the whole thing. When the agency calls, you and the caller each read part of that number to each other. You confirm they are real, and they confirm they are talking to the right person. If a caller cannot do this exchange, you are not talking to a real assigned agency. Keep that number somewhere safe and do not give the full number to anyone.
How to tell a real IRS private collector from a scam
Real collection follows rules. Scammers break all of them, because breaking them is the whole point. Put the call you got next to the two columns below. If it lines up with the right column on even one row, treat it as a scam until you have verified otherwise.
| A real assigned agency | A scammer |
|---|---|
| Reaches you by mail first. You got Notice CP40, then the agency's letter, before any call. | Calls, texts, or emails out of nowhere with no letter ever sent. |
| Completes the taxpayer authentication number exchange to prove who they are. | Cannot or will not verify, and pushes you to pay before you can think. |
| Directs payment to the U.S. Treasury through IRS channels. | Demands a gift card, prepaid card, wire transfer, cryptocurrency, or payment to the agency directly. |
| Stays courteous and gives you time to confirm everything yourself. | Threatens arrest, deportation, license loss, or immediate seizure to force a fast payment. |
| Lets you hang up and call the IRS back independently. | Insists you stay on the line and only call the number they gave you. |
Two details do most of the work. Real contact starts on paper. If no letter ever came, the call is suspect, full stop. Real payment never goes to the collector. A tax payment is made out to the U.S. Treasury, not to CBE Group, Coast Professional, ConServe, or any individual. Any caller steering you toward a gift card or a wire is a thief, regardless of how official they sound.
What to do when a call feels wrong
You do not have to decide on the spot. Hang up and verify on your own terms.
- Do not give out your Social Security number, bank details, or the full taxpayer authentication number.
- Do not call back the number the caller gave you. It can be spoofed.
- Pull your IRS account transcript or sign in to your IRS online account to see whether your balance was actually assigned, and to which agency.
- If you confirm a real assignment, work it through the agency named in your CP40 letter, not the voice on the phone.
- If it was a scam, report it to the Treasury Inspector General for Tax Administration.
What a private collector can and cannot do
This is the part most people get wrong, and the part that causes needless panic. A private collection agency is a debt collector working a contract. It holds none of the IRS enforcement powers. The agency can ask you to pay. It cannot take.
| A private agency can | A private agency cannot |
|---|---|
| Contact you about the balance by mail and phone. | Garnish your wages. A wage levy is an IRS action only. |
| Explain how much is owed and for which years. | File a federal tax lien against your property. |
| Set up a payment arrangement on the government's behalf. | Levy or seize your bank account, home, or other property. |
| Point you to IRS payment options. | Take payment to itself. Money goes to the U.S. Treasury. |
| Follow up within the limits of the law. | Threaten, harass, or pressure you. That is a violation. |
Every action in the right column, the wage garnishment, the lien, the levy, the seizure, is a power Congress gave the IRS, not its contractors. A private agency that hints it can do any of these is either bluffing or is not a real agency. By law these companies must follow the Fair Debt Collection Practices Act and respect the Taxpayer Bill of Rights. If one threatens or harasses you, that is reportable to the Treasury Inspector General for Tax Administration.
This cuts the panic down to size. The enforcement you actually fear can only come from the IRS, and it does not arrive through a surprise phone call. It arrives through specific written notices with deadlines. If you have received one of those, that is the real clock, and it is covered under levies and garnishments.
Not sure if the call or letter is real?
Send us the notice or a short description of the call. We will help you read it, tell you whether it looks legitimate, and point you to the right next step at no cost.
The call is the symptom. The debt is the problem.
A private collector showing up means one thing: there is an unresolved IRS balance that has been sitting long enough to go inactive. Stopping the calls does nothing about the balance. Resolving the balance stops the calls. The IRS gives you real options depending on your situation.
- Pay over time. An installment agreement spreads the balance into monthly payments and pulls the account back out of collection.
- Pause collection on hardship. If paying anything would leave you unable to cover basic living costs, currently not collectible status can stop collection entirely for a time.
- Settle for less. An offer in compromise can reduce the balance, but only when your assets and income genuinely cannot cover it.
- Cut the penalty portion. If penalties are a big part of what you owe, penalty abatement can remove some of them.
If a levy or garnishment is already active, that is a separate and faster moving problem. See levies and garnishments for how to stop one. If you simply owe and cannot pay, start with your options when you owe the IRS and cannot pay.
The honest part
A private collection agency is not a sign that the IRS is about to take your house tomorrow. It is a sign your account has been ignored long enough to be handed off. The risk is not the collector. The risk is letting the balance keep aging while penalties and interest grow, and letting a scammer exploit the confusion in the meantime. No one can promise the IRS will reduce or forgive your debt. What you can do is confirm what is real, stop reacting to phone pressure, and deal with the underlying balance through the actual programs that exist.
The legal basis
What this is grounded in
- The private debt collection program, the three authorized agencies, the CP40 notice, and the taxpayer authentication number: the IRS Private debt collection page.
- Accounts assigned to agencies, payment rules, and scam guidance: the IRS Accounts assigned to private collection agencies page.
- Understanding the first letter: Understanding your CP40 notice.
- Your protections during collection: the Taxpayer Bill of Rights.
- Spotting fraud: Recognize tax scams and fraud.
- Confirm an assignment yourself: Get transcript.
- Report a collector who acted improperly: the TIGTA hotline.
These are the controlling IRS pages, linked live so you can confirm every point yourself. This article is educational and is not legal or tax advice. Talk to a licensed enrolled agent, CPA, or tax attorney before acting.
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