Private Debt Collection

Full Definition

The IRS assigns some unpaid tax accounts to private collection agencies. It states it does so because it is required to: "The IRS is required by law to contract with private collection agencies to assist in the collection of certain unpaid tax accounts."

You are told first. The IRS sends CP40 for an individual account or CP140 for a business account, and states the notice contains the name and contact information of the assigned agency. It also states the agency will send you a letter confirming the assignment.

The verification procedure is what separates this from the scam it resembles, and the IRS describes it in two steps. The agency will ask you for your name and address of record. Then, on CP140: it asks you for the FIRST FIVE numbers of the Taxpayer Authentication number in your notice, and provides the last five itself.

A caller who cannot supply the last five digits has not been assigned your account.

Two other things the IRS states. The names of all agencies under contract with it are published on its private debt collection page. And you can still pay the IRS directly — the assignment does not route your money through the agency.

The IRS also states the agency will work with you to set up a payment plan if you cannot pay in full.

Sources

• Understanding your CP40 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

Last reviewed 2026-08-21 by Tax Resolution Clarity editorial.