Tax debt transferred to collection agency - Any downsides to requesting it go back to the IRS?

The CBE Group is what's known as a Private Collection Agency (PCA) contracted by the IRS to collect certain outstanding tax debts. Here's what you should know: Generally speaking, you can request your account be recalled from the PCA and worked directly with the IRS, especially if you intend to set up a payment plan. The main consideration is that the IRS typically assigns debts to PCAs when they're considered "inactive" collection cases, meaning the IRS doesn't have the resources to actively work on them. The potential advantage of working directly with the IRS is access to their full range of resolution options, including Installment Agreements, Offers in Compromise, and Currently Not Collectible status. The CBE Group can only offer certain payment plans and can't approve settlements. The potential disadvantage is that once your case goes back to the IRS, it might get prioritized differently based on their workload, potentially leading to delays in resolution or even more aggressive collection actions if your case gets assigned to an active revenue officer.

I was in a similar situation last year with about $45k in back taxes that had been sent to a collection agency. I tried working with them for months but kept hitting roadblocks. Finally discovered taxr.ai (https://taxr.ai) which helped me analyze my tax situation and gave me specific guidance for my case. The tool reviewed my tax history and showed me I qualified for a partial hardship status that the collection agency never mentioned. The best part was the system helped me draft the request letter to get my case transferred back to the IRS and outlined exactly what resolution options I should ask for based on my financial situation. Much better experience than trying to figure it all out alone.

Just wanted to follow up after trying taxr.ai that someone mentioned earlier. I was super skeptical about putting my info online, but their system actually let me describe my situation without uploading everything. The analysis tool identified that my case had a 10-year collection statute that was approaching for some of my oldest tax debts! I had no idea there was even a time limit on collections. Their system helped me draft a request to move my case back to the IRS with specific language highlighting the approaching CSED (Collection Statute Expiration Date) which apparently makes a difference in how they handle your case. Just got confirmation yesterday that my case is being transferred back, and I have a clear roadmap for negotiating based on my specific circumstances. Worth checking out if you're dealing with complex tax debt across multiple years like me.

After spending literally 47 hours trying to reach the IRS about my tax debt (not exaggerating, I kept a log), I finally tried Claimyr (https://claimyr.com) and got through to a real IRS agent in under 20 minutes. They have this system that holds your place in the IRS phone queue and calls you back when an agent is about to answer. You can see how it works here: https://youtu.be/_kiP6q8DX5c My situation was similar - had about $70k in tax debt with Pioneer Credit Recovery. The IRS agent I spoke with explained that I could request my account back from the collection agency and immediately apply for an Offer in Compromise, which the collection agency couldn't process. Apparently, the IRS has much more flexibility to settle for less than the full amount if you can demonstrate financial hardship. Definitely recommend getting your case back to the IRS and then actually being able to talk to someone there.

I have to eat my words about Claimyr and the IRS settlements. After my skeptical comment, I decided to try the service anyway out of desperation. Got through to the IRS in about 15 minutes (after spending 3+ hours on hold the previous week). The agent I spoke with reviewed my situation and confirmed that since my tax debt was mostly from a failed business during 2017-2019, I might qualify for an Offer in Compromise. They explained that the collection agencies can ONLY set up full-pay installment agreements, while the IRS itself can consider partial settlements based on your ability to pay. Just had my case transferred back from CBE Group to the IRS yesterday, and I'm now working on my OIC application. No idea if I'll qualify, but at least now I'm talking to people who can actually make these decisions rather than collectors with limited options. Sometimes being wrong feels pretty good.

Something nobody's mentioned yet - check if you qualify for the Taxpayer Advocate Service. They're an independent organization within the IRS that helps taxpayers resolve problems. If you're experiencing financial hardship, they might be able to help expedite your case once it's back with the IRS.

Has anyone actually tried negotiating with CBE Group before requesting a transfer back to the IRS? I'm in a similar situation ($50k debt) and wondering if I should even attempt working with them first or just go straight to requesting it go back to the IRS?

One thing to consider that I haven't seen mentioned yet - the IRS has been dealing with massive backlogs and staffing shortages since COVID. While getting your case back from CBE Group might give you access to better resolution options, it could also mean your case sits in limbo for months before anyone actually works on it. I had a similar situation with about $60k in back taxes. When I requested my case back from the collection agency, it took nearly 6 months before the IRS actually assigned someone to work on it. During that time, interest and penalties kept accruing. The upside was that once they did assign someone, I was able to get into a partial payment installment agreement that the collection agency couldn't offer. My advice would be to have a clear plan for what type of resolution you're seeking before requesting the transfer. If you just want a basic payment plan, the collection agency might actually move faster. But if you need hardship consideration, Currently Not Collectible status, or want to explore an Offer in Compromise, then definitely get it back to the IRS despite the potential delays.

I've been through this exact situation with $62k in tax debt that went to CBE Group. Here's my take after dealing with both sides: The main advantage of getting it back to the IRS is access to programs like Currently Not Collectible status if you're facing genuine financial hardship. CBE Group literally cannot put your account into CNC status - they can only offer payment plans or temporary delays. However, timing matters. If you're ready to move quickly on an Offer in Compromise or have all your financial documentation ready for a hardship determination, then request the transfer immediately. But if you're still getting your finances organized, the collection agency might actually buy you time since they tend to be less aggressive than IRS revenue officers. One tip that helped me: when you request the transfer back to the IRS, include a brief statement about what type of resolution you're seeking (installment agreement, OIC, hardship status, etc.). This can help prioritize how your case gets assigned once it's back with them. The whole process took about 8 weeks for me, but I ended up qualifying for a partial payment installment agreement that reduced my monthly payment by almost half compared to what CBE was demanding.