How The IRS Is Different Than Your Typical Creditor

When it comes to federal taxes, a creditor-debtor relationship is created between the IRS and the taxpayer. The IRS is a government creditor, and its claim against the taxpayer for unpaid taxes is a form of debt.

IRS Debt Collection 

Debt collection by the Internal Revenue Service is different from that of a general creditor. To collect a debt, a general creditor must commence a proceeding in court, carry the burden of proof that the debt is owed and he is entitled to payment, obtain a judgment, and collect on the judgment against the debtor.  For instance, if you owe credit card debt, the credit card company can’t levy your bank account right away. First, they have to sue you, obtain a judgment, then they can levy your bank account.

In the Internal Revenue Service’s case, the procedures in collecting a debt by a general debtor are reversed. In the assessment of a tax claim, payment precedes defenses, and the burden of proof is shifted to the taxpayer. The assessment supersedes the pleading, proof, and judgment necessary in action at law and has the force of such a judgment. After the IRS assesses the tax, it may summarily collect the assessment by seizing the taxpayer’s property, even without judicial intervention. 

Sometimes The IRS Uses Private Debt Collectors

While the IRS is usually the agency in charge of collecting your tax debt, sometimes the IRS will use private debt collectors. In brief, the IRS will use private debt collectors to collect inactive debts; that is, debts that the IRS is not actively working on for collection. As of September 23, 2021 the IRS will assign collection for certain inactive tax debts to (1) CBE Group Inc.; (2) Coast Professional Inc.; or (3) ConServe.


You won’t receive a call from a private tax debt collector without prior notice. Before a private debt collector initiates contact you will receive Notice CP 40 and Publication 4518 via U.S. Mail from the IRS. Furthermore, you will receive an initial collection letter from the private debt collector with information on how to resolve your overdue tax debt. Of course, upon receiving these notices, it’s advisable to seek counsel from a tax attorney to learn how more about your tax resolution options. Should you hire a tax attorney the private debt collector will be forced to communicate with your lawyer rather than directly with you.

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