State officials caution the public about scams related to tax collections

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Acting on authorization from Congress, the Internal Revenue Service (IRS) recently hired four private debt collection agencies to pursue overdue federal taxes. Unfortunately, this new activity has prompted some scammers to contact taxpayers, including Maine residents, pretending to be collectors working on behalf of the IRS, and demanding immediate payment.

Maine’s Bureau of Consumer Credit Protection, which licenses debt collectors, is encouraging consumers to educate themselves in order to avoid falling victim to this scam. The four companies that have entered into contracts to collect back taxes for the IRS are:

• CBE Group, of Cedar Falls, IA; • Conserve, of Fairpoint, NY; • Performant, of Livermore, CA; and • Pioneer, of Horseheads, NY.

Hundreds of Maine consumers have contacted state officials at the Bureau of Consumer Credit Protection and the Attorney General’s Office, to report that they have been called by scammers posing as debt collectors authorized to pursue overdue taxes.

Bureau Superintendent Will Lund emphasized that consumers can protect themselves by knowing the special rules under which legitimate collectors must operate.

“Individuals who owe overdue taxes will hear first from the IRS and not directly from the collector,” said “This initial contact will be a letter informing the taxpayer that the IRS is giving the account to one of the four legitimate collection companies. The letter will provide complete details about the collector.”

Before attempting to contact a consumer by phone, the private debt collector must send a letter, setting forth information about the debt and offering to verify (prove) the debt upon the consumer’s request. If the taxpayer agrees to pay a valid debt, that payment can either be transmitted electronically to the IRS, or it can be paid by check made payable to US Treasury. In both cases, payments must be transmitted or sent directly to the IRS, not to the collection agency.

“If a company contacts a taxpayer by phone without prior written notice from the IRS and from the collection agency, or if the caller demands immediate payment by phone, or by prepaid debit card, iTune or gift card, then it’s a scam,” Lund said.

Individuals with questions or concerns should call the Bureau of Consumer Credit Protection, to verify whether the collection agency is legitimate. The IRS has also set up a special hotline, at the office of the “Treasury Inspector General for Tax Administration” (TIGTA) to enable consumers to file complaints about a private collection agency or to report misconduct by an employee. The TIGTA hotline number is 800-366-4484, or consumers can visit www.tigta.gov or write to:

Treasury Inspector General for Tax Administration Hotline Post Office Box 589 Ben Franklin Station Washington, DC 20044-0589.