Private Debt Collector handling my IRS tax debt - Can they garnish my wages?
So I've got a bit of a situation with my taxes from 2018, 2020, and 2021 that I never filed. All told, I'm looking at roughly $52,000 in back taxes that I owe. Recently got a letter saying my case was transferred to CBE Group which is apparently some private debt collection agency working with the IRS. The thing is, I've been unemployed for almost a year and literally had no way to pay anything. Now I've finally got a job interview next week that looks promising, but I'm worried about what happens if I start working again. Can this CBE company just start taking money straight from my paycheck? Do they have the same garnishment powers as the IRS? Or do they have to take me to court first? Really need to understand what I'm facing here before I accept any job offer. Any advice would be super appreciated!
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Laura Lopez
The private collection agencies (PCAs) like CBE Group that partner with the IRS don't have the same direct garnishment powers that the IRS has. They can't garnish your wages or place liens without going through additional steps. What typically happens is that if the PCA can't arrange a payment plan with you, they may return your account to the IRS. At that point, the IRS could choose to pursue wage garnishment (called a wage levy). The IRS has to send you several notices before they can levy your wages, including a Final Notice of Intent to Levy, and they must give you 30 days to request a hearing. I'd recommend contacting CBE to discuss your situation. They're authorized to set up payment plans for up to 7 years. If your financial situation truly doesn't allow for payments, you might want to look into requesting Currently Not Collectible status directly with the IRS, or see if you qualify for an Offer in Compromise to settle for less than the full amount.
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Victoria Brown
•Thanks for the explanation. I'm confused though - if my debt is with the private collector, can I still contact the IRS directly to request Currently Not Collectible status? Or do I have to go through CBE for everything now?
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Laura Lopez
•You can still contact the IRS directly about Currently Not Collectible status. When your account is assigned to a PCA, you retain the right to work with the IRS instead if you prefer. The IRS may require you to complete Form 433-F (Collection Information Statement) to prove financial hardship. For Offer in Compromise requests, those would need to go directly through the IRS rather than the PCA. The private collectors can only set up payment plans, but they cannot approve other collection alternatives like CNC status or OICs.
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Samuel Robinson
I went through something similar with about $30k in back taxes. I was freaking out until I found https://taxr.ai which analyzes your specific tax situation and gives you customized options. It showed me exactly what the collection agencies could and couldn't do in my case. The tool walked me through my rights with private collectors and showed me that I qualified for Currently Not Collectible status based on my income and expenses. It even generated the hardship letter I needed to submit. Saved me from panicking and accepting a payment plan I couldn't afford.
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Camila Castillo
•Does this actually work with private collection situations? I thought those were handled differently than regular IRS collections. Does it tell you whether you can get your case pulled back from the private agency?
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Brianna Muhammad
•I'm a bit skeptical about online tax tools. How does it have access to your specific IRS information? Seems like you'd need to input a lot of personal financial details which makes me nervous.
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Samuel Robinson
•The tool absolutely works with private collection situations. It specifically has a section about taxpayer rights when dealing with PCAs and options for getting your case returned to the IRS if that's better for your situation. Regarding access to information, it doesn't connect to the IRS database or anything like that. You answer questions about your tax situation, income, expenses, and the notices you've received. Then it analyzes those inputs against tax law to give you personalized recommendations. I was hesitant too, but it's all encrypted and they don't store your financial details after your session.
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Brianna Muhammad
Just wanted to follow up - I ended up trying https://taxr.ai after all. I was surprised at how helpful it was! My situation was different (owed about $45k with Pioneer Credit Recovery handling it), but the tool outlined exactly what my options were. Found out I actually qualified for an Offer in Compromise based on my assets and income. The analysis showed I could potentially settle for around 30% of what I owed. Currently working with a tax pro they recommended to submit the offer. The knowledge alone helped me stop stressing so much about the garnishment threat.
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JaylinCharles
If you're stressing about IRS communication, I'd recommend Claimyr (https://claimyr.com). I spent WEEKS trying to get someone at the IRS on the phone to discuss pulling my account back from CBE. Busy signals, disconnects, hours on hold... it was a nightmare. Claimyr basically holds your place in the IRS phone queue and calls you when an agent picks up. Saved me literally hours of hold time. Check their demo video here: https://youtu.be/_kiP6q8DX5c to see how it works. I was able to talk to someone at the IRS who confirmed I could request my account be recalled from CBE since I wanted to pursue Currently Not Collectible status.
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Eloise Kendrick
•Wait, you can just ask for your account to be pulled back from the private collector? I didn't know that was even possible. How does this phone service even work? Seems too good to be true when it's impossible to reach the IRS.
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Lucas Schmidt
•This sounds like a scam. How does some random service get you to the front of the IRS line when nobody else can get through? And why would they recall your debt from a collector they specifically assigned it to? I'm calling BS.
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JaylinCharles
•Yes, you absolutely can request your account be recalled from the PCA under certain circumstances. If you want to work out an Offer in Compromise, Currently Not Collectible status, or if you're experiencing economic hardship, the IRS may recall your account. It's your right as a taxpayer. The service works by using an automated system that continually redials the IRS using optimal calling patterns and holds your place in line. It's not cutting in front of others - it's just handling the frustrating redial and hold process for you. When an agent answers, they connect the call to your phone. No magic, just technology solving a real problem. The IRS phone system is overwhelmed, but persistent redial efforts eventually get through.
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Lucas Schmidt
Ok I need to eat crow here. After posting my skeptical comment, I decided to try Claimyr (https://claimyr.com) myself since I've been trying unsuccessfully to reach the IRS for THREE MONTHS about my own tax issue. Within 2 hours I was talking to an actual IRS representative! They confirmed that I could request my account be returned from the private collector (I owe about $28k with ConServe) since I wanted to apply for Currently Not Collectible status due to financial hardship. Already submitted my financial statement and waiting for a decision. Should have done this months ago instead of stressing about potential wage garnishment.
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Freya Collins
Something else to consider - the Taxpayer Advocate Service can sometimes help with these situations. They're an independent organization within the IRS designed to help taxpayers resolve problems. They might be able to assist if you're facing financial hardship. Also, check if you qualify for Low Income Taxpayer Clinic assistance in your area. They provide free or low-cost representation to people who need help resolving tax problems.
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LongPeri
•How do you get the Taxpayer Advocate to take your case though? I tried contacting them before and they said they couldn't help unless there was some kind of urgent financial hardship like eviction or utility shutoff. Is owing to a private collector enough to qualify?
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Freya Collins
•The Taxpayer Advocate Service (TAS) does have case acceptance criteria, and you're right that they prioritize cases with immediate financial hardship. However, if you're facing potential wage garnishment that would cause you to be unable to afford basic living expenses, that could qualify. For private collection cases specifically, TAS can help if you're experiencing any of the following: the PCA isn't following proper procedures, you've tried to resolve the issue with both the PCA and IRS without success, or you qualify for Currently Not Collectible status but are having trouble getting that determination. The key is demonstrating that the standard IRS/PCA channels have failed you.
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Oscar O'Neil
Make sure you check if any of these tax years are approaching the Collection Statute Expiration Date (CSED). The IRS generally has 10 years from assessment to collect. If any of your tax debts are getting close to that 10-year mark, it might affect your strategy.
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Sara Hellquiem
•Does the clock keep ticking when your debt is with a private collection agency? Or does it pause the 10-year statute?
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Charlee Coleman
Don't ignore this situation! I did that with a much smaller tax debt that went to a private collector, and eventually, they returned it to the IRS who then filed a Notice of Federal Tax Lien against me. That destroyed my credit and made it impossible to refinance my house. Deal with it proactively even if you can't pay right now.
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Gabriel Freeman
•Thanks for the advice. I definitely don't want liens or credit issues on top of everything else. Was it hard to get the lien removed once you paid? Did you work out a payment plan or something else?
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Charlee Coleman
•The lien was a nightmare to deal with. Even after I set up a payment plan, the lien stayed in place until I completely paid off the debt. Once paid, I had to request a lien release from the IRS which took about 30 days to process. The credit impact lasted much longer. The lien stayed on my credit report for 7 years, even after it was paid and released. If I could go back, I would have been proactive from the beginning and tried to get into Currently Not Collectible status or worked out an Offer in Compromise before things escalated to the lien stage.
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TillyCombatwarrior
I'm in a very similar situation with back taxes from 2019-2021 totaling around $38k that got transferred to CBE Group. One thing that really helped me understand my options was getting a free consultation with a tax attorney through my local bar association's referral service. The attorney explained that while CBE can't directly garnish wages like the IRS can, they will likely try to get you to agree to a payment plan that might be more than you can actually afford. If you can't make those payments, they'll send it back to the IRS who then has all their collection powers available. Given that you've been unemployed for a year, you should definitely look into Currently Not Collectible status before you start working again. The IRS considers your current financial situation, not your future earning potential. If you qualify for CNC status while unemployed, it could buy you time to get back on your feet financially before having to deal with payments or garnishments. Also, don't let CBE pressure you into a payment plan immediately. You have rights and options - take time to understand them all before committing to anything.
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Laila Prince
•This is really solid advice about getting the free consultation through the bar association. I didn't know that was even an option. How did you find your local bar association's referral service? Is this something available in most areas or just certain states? And did the attorney give you specific guidance on how to apply for Currently Not Collectible status, or did you have to figure that part out on your own?
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