A large chunk of overdue tax bills has sat idly uncollected due to the IRS’s lack of resources. But that’s about to change, thanks to some debt collectors that the IRS hired.
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.
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 delinquent taxpayers could now receive a Notice CP40 telling them that the IRS assigned their case to a private collection agency.