A Private Collection Agency vs. the IRS Itself
A private firm calling about an IRS debt can be legitimate. The notice you were sent is what tells you, and the check runs in both directions.
Quick Answer
Assignment to a private agency does not change who the debt is owed to, and the IRS states on both notices that you can pay it directly. What it changes is who calls. The useful thing on these two notices is the verification, and CP140 describes it as a two-way check: you supply the first five digits of the Taxpayer Authentication number printed on your notice, and the agency supplies the last five. Read that as a test you are administering rather than one you are taking. Anyone can ask for digits; only a firm that has actually been assigned your account can supply the other half. Keep the notice, because without it there is no number to check against.
A private collection agency
Advantages
- It is announced in advance. The IRS sends CP40 for an individual account or CP140 for a business one, naming the assigned agency.
- It is verifiable, and the check runs both ways. On CP140 the IRS states the agency asks you for the first five numbers of the Taxpayer Authentication number in your notice "and the private collection agency will then provide the last five numbers to complete the verification".
- The IRS publishes the names of every agency under contract with it on its private debt collection page.
- The agency will set up a payment plan. The IRS states it "will work with you to set up a payment plan if you can't pay in full".
Disadvantages
- It is unsolicited contact about money, which is what every impersonation scam looks like.
- Without the notice you have no number to verify against.
- The IRS states it is required by law to contract with private agencies for certain accounts, so it is not something you opted into.
Best For
Who is calling: a firm under contract, assigned a specific account.
Typical Cost
The IRS publishes no fee for the assignment itself.
The IRS
Advantages
- You can always pay it directly. The IRS states so on both CP40 and CP140, and points to its own payments page.
- Its collection notices carry the appeal routes — Collection Due Process on the section 6330 notices, the Collection Appeals Program on Form 9423.
- The Taxpayer Advocate Service is an independent organisation inside it, named on several of its own notices.
Disadvantages
- An assigned account still sits with the agency for working purposes.
- The IRS notices carry the deadlines, so nothing about the assignment removes the need to read them.
Best For
Who is calling: the agency the debt is actually owed to.
Typical Cost
The IRS publishes no fee for the assignment itself.
The Verdict
Assignment to a private agency does not change who the debt is owed to, and the IRS states on both notices that you can pay it directly. What it changes is who calls. The useful thing on these two notices is the verification, and CP140 describes it as a two-way check: you supply the first five digits of the Taxpayer Authentication number printed on your notice, and the agency supplies the last five. Read that as a test you are administering rather than one you are taking. Anyone can ask for digits; only a firm that has actually been assigned your account can supply the other half. Keep the notice, because without it there is no number to check against.
Frequently Asked Questions
How do I know the caller is legitimate?
Why was my account transferred?
Do I have to deal with the agency?
Where do I send a mailed payment on a business account?
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Sources
- Understanding your CP40 notice — Internal Revenue Service, retrieved 2026-08-21
- Understanding your CP140 notice — Internal Revenue Service, retrieved 2026-08-21
- Publication 4518, What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency — Internal Revenue Service, retrieved 2026-08-21
Sourced to primary IRS materials and editorially reviewed. Not reviewed by a tax professional. Not tax advice. Report a correction.