Not everything sent to you from the IRS is bad news. However, if you get a CP40 IRS Notice, then you need to pay attention as it shouldn’t be taken lightly.
A CP40 IRS Notice is an informal document from the Internal Revenue Service that notifies you that your tax account has been sent to a private collection agency. The notice is relatively new following a law that was passed in 2015.
If you receive a CP40 IRS Notice, you need to take action. Here is everything you need to know about the CP40 IRS Notice.
What is the CP40 IRS Notice?
In 2015, a law was passed that allowed the Internal Revenue Service (IRS) to forward unpaid tax debt to a private collection agency. The reason for the legislation was to reduce some of the work the IRS receives, yet has certain restrictions.
For example, under the 2015 law, the IRS is only allowed to work with four private collection agencies:
● CBE (800-910-5837)
● ConServe (844-853-4875)
● Performant (844-807-9367)
● Pioneer (800-448-3531)
The IRS is mandated under the 2015 law to use one of the four above private firms for tax collection. Any other private collection agency that claims it is resolving tax debt on behalf of the IRS is fraudulent.
When Do You Receive a CP40 IRS Notice?
The IRS will always contact you before a private collection agency if you need to resolve tax debt. You need to be careful with CP40 IRS Notices because there are plenty of scammers that attempt to pose as the IRS and submit fake notices.
Therefore, the process works as follows:
- The IRS will send you a Notice CP40 and Publication 4518. The first round of correspondence is used to let you know that you have overdue taxes and that the debt has been assigned to a private collection agency.
- The second round of correspondence involves the private collection agency which has been assigned your tax debt reaching out to with an initial contact letter. The letter will contain information about how to settle overdue taxes.
It is important to check each letter for a Taxpayer Authentication Number. The number is designed to confirm your identity as well as indicate the letter is legitimate. Keep in mind, there are a lot of IRS scams out there looking to steal your money.
What Should You Do After Receiving a Notice CP40?
You can never be too safe when it comes to avoiding scams in the 21st century. Therefore, never just assume a CP40 IRS Notice is legitimate no matter how legitimate the letter reads.
Taxpayers should always validate that a caller is from one of the four private collection agencies allowed to do business with the IRS. The agency should always ask a series of questions to verify your identity. On the other hand, you should get asked to exchange portions of the Taxpayer Authentication Number with the agency to verify each other’s identity.
Private collection agencies are required by law to treat you with professionalism, courtesy, and respect. The agency is not allowed to threaten you for unpaid tax debt. If that is the case, you must report their violations immediately.
How can You Avoid IRS Scams like Fake CP40 Notices?
If you are contacted by phone or email from a person who claims they represent a private collection agency authorized to settle your tax debt, use caution. Never provide any personal information before double-checking that:
● The collection agency is one of the four authorized to work with the IRS.
● You have received an official CP40 Notice and an initial orientation letter from the agency. The agency must send you that correspondence first, before contacting you over the phone.
● The CP40 Notice and collection agency letter contain a Taxpayer Authentication Number.
If you are still skeptical, consider reaching out to a tax professional. Reputable firms are familiar with CP40 Notices and dealing with private collection agencies.
Get Help with Your CP40 Notice and Tax Debt
Levy & Associates can meet with you today. Call us at 800-TAX-LEVY or visit www.levytaxhelp.com to schedule a free initial consultation. There are ways to resolve tax debt in a manner that won’t put you into financial hardship.