Performant Called About an IRS Tax Debt?
If are receiving mail or calls from Performant Recovery about IRS taxes, you should be wondering if it’s a scam. Only the IRS collect taxes, don’t they? And I thought the IRS didn’t make calls like this. That is so 2016. If you got a call from about IRS taxes in the last decade, the IRS would tell you it’s a scam and to hang up the phone. So why is Performant calling about an IRS tax debt? Are you confused yet? That’s okay. Read on because it gets worse.
Who is Performant Credit Recovery?
Performant Recovery, a division of Performant Financial Corporation, is a very large third party collection agency based in California. They also have offices in Florida, Texas, and Oregon.
Performant is a leading debt collector for Healthcare, Education, and Government. That means they chase medical bills, student loans, and now IRS taxes.
Performant is now an IRS Tax Collection Agency
The 2015 FAST Act now authorizes the IRS to outsource tax collections to private debt collection companies. Performant is one of four private debt collection companies now hoping to show the Washington they can collect taxes better than the IRS itself. This is unlikely, however. The last time the IRS tried outsourcing tax collections to private collection agencies it actually lost money. But the law is the law and this will be in play for at least the next five years.
We all make fun of government inefficiency, but the IRS looks pretty good compared to using private collection agencies. The IRS collects $4 for every $1 spent. Compare that to Performant and their ilk, who from October 2017 to September 2018 brought in just two and a half bucks for every dollar the government gave them to collect.
Companies like Performant that may call you about IRS taxes:
- CBE Group, authorized IRS debt collector
- ConServe, authorized IRS debt collector
- Pioneer Recovery, authorized IRS debt collector
1) The IRS must send you a letter to your last known address, notifying that your past due account is now with a private collection agency, in this case Performant.
2) Performant must mail you a collections letter to the same address, notifying you Performant is now collecting on your IRS account.
3) If your last known address is out of date and you don’t receive mail from the IRS or Performant, you are still considered “legally notified” and Performant may proceed with collections.
4) Performant will begin calling you regarding your IRS taxes, and will likely send you further demands for payment in the mail to your last known and any newly discovered addresses.
Should you Talk to Performant?
If Performant (or the IRS) calls you and you do actually owe taxes, we always recommend paying the taxes if you can. The best way to make the IRS go away is to throw money at them. But often easier said than done!
Whether or not you should trust a call about taxes is a different matter. The IRS has been very vocal about never trusting a call about IRS taxes. That isn’t how the IRS operates. The only calls about IRS taxes are from scammers. The IRS estimates that over $23,000,000 has been stolen from taxpayers in recent years by phone call scams about IRS taxes. It’s been estimated that there are over 1,000,000 IRS scam calls made a year, many of them by sophisticated international crime organizations. This is setting up a mess for the American taxpayer.
Action Steps if Performant Calls You
Until you verify that Performant is indeed Performant, assume it’s a scam. DO NOT give your Social Security Number or any other personal or financial information to them over the phone, ever.
If you have an accountant who has filled all your tax returns and you do not believe you owe tax, call your accountant. If this is a surprise and you don’t know what to do, call a tax relief company. They can and should verify, for free, if you owe back taxes to the IRS, and can advise on your rights and options.