A CP40 tells you the IRS has assigned your unpaid tax balance to a private collection agency (PCA). That's a company under contract with the IRS. Federal law requires the IRS to use private agencies for certain overdue accounts it isn't actively working. The debt is still an IRS debt, and you still have every option to pay or set up a plan. What changes is who calls you about it. Because scammers pose as collectors, the most important thing you can do is confirm the agency is genuine before sharing anything.
Why you got a CP40
The IRS says it placed your account with a PCA because one of these applied:
- The IRS lacked the resources to work it, or couldn't locate you.
- A year passed without you or your representative interacting with the IRS on the account.
- More than 2 years passed since the tax was assessed and the account wasn't assigned for collection.
The IRS won't assign accounts in certain situations, including if you are deceased, under 18, in a designated combat zone, a victim of tax-related identity theft, receiving SSI or SSDI, have income at or below 200% of the poverty level, are under audit, litigation, criminal investigation or levy, have a pending or active offer in compromise or installment agreement, have a right of appeal, are an innocent spouse case, or are in a declared disaster area and requesting relief. If you think one applies to you, call the IRS.
What the CP40 says
- The name, address and phone number of your assigned agency.
- Your Taxpayer Authentication Number. This is a code you and the agency use to confirm each other's identity. Keep it somewhere safe.
- The balance that was assigned.
- How to pay the IRS directly, at IRS.gov/payments.
How to verify the agency is real
The IRS publishes the current list of contracted agencies on its private debt collection page. As of the IRS's latest update, effective since September 23, 2021, they are:
| Agency | Mailing address | Phone |
|---|---|---|
| CBE Group, Inc. | P.O. Box 2217, Waterloo, IA 50704 | 800-910-5837 |
| Coast Professional, Inc. | P.O. Box 425, Geneseo, NY 14454 | 888-928-0510 |
| ConServe | P.O. Box 307, Fairport, NY 14450 | 844-853-4875 |
Check the list at IRS.gov/privatedebtcollection before you talk to anyone, since contracts can change. Then:
- Expect two letters before a call. The IRS sends the CP40 first. The agency then sends its own letter confirming the assignment. The IRS says the agency will not phone you before sending that letter.
- Match the name. The agency that contacts you must be the one named on your CP40 and on the IRS list.
- Use the authentication number. You and the caller exchange portions of the Taxpayer Authentication Number to confirm each other's identity.
- Check your transcript. Your IRS account transcript (through Get Transcript or your Online Account) will show transaction code 971 noting the referral to a private debt collection agency and the CP40.
- When in doubt, hang up and call the number from the IRS list, not one given by the caller.
What to do
- Read the CP40 and keep it, along with the agency's letter.
- Decide whether the balance is right. Compare it with your records and IRS Online Account. If you already paid, give the agency your payment details so the IRS can credit it.
- Pay the IRS directly if you can. Use IRS Direct Pay, EFTPS, a card through an IRS-approved processor, or a check or money order payable to the "United States Treasury," with your name, SSN and tax year on it.
- If you can't pay in full, ask the agency for a payment plan. The IRS says agencies can set up plans that pay in full within seven years or by the collection expiration date, and they can't charge a fee for it. See IRS payment plans.
- If you'd rather deal with the IRS directly, send a written request to the agency. The IRS says this must be in writing.
The agency can also set up preauthorized direct debit with your written permission. Those payments are still made payable to the United States Treasury.
What a private agency can and can't do
They will: send a letter before calling, identify themselves as IRS contractors, follow the Fair Debt Collection Practices Act, and help set up and monitor payment arrangements.
They won't: ask you to pay them directly or by prepaid debit, iTunes or gift card; collect financial information; file a lien or issue a levy; accept or reject offers in compromise; or put accounts in currently not collectible status. For an offer in compromise or hardship status, you'll need to deal with the IRS.
What happens if you ignore it
The agency will keep trying to reach you, and penalties and interest keep adding to the balance. The agency itself can't take enforcement action. But the IRS can still file a Notice of Federal Tax Lien or issue a levy on an overdue account. Ignoring a PCA doesn't make the debt go away.
Is this notice real?
A real CP40 matches your IRS Online Account or transcript and names one of the agencies on the IRS's published list. Warning signs of a scam: a call with no letters first, a demand to pay right now, a request for gift cards, prepaid cards or a wire, threats of arrest, or a collector who can't give their part of your authentication number. Publication 4518 says to report private collection agency scams or misconduct to the Treasury Inspector General for Tax Administration (TIGTA) hotline at 800-366-4484 or tigta.gov. See our IRS scams guide.
Frequently asked questions
Why is the IRS using a private company for my tax debt?
Congress passed a law requiring the IRS to use private collection agencies for certain overdue accounts, usually older ones the IRS isn't actively working.
Can the agency take my wages or file a lien?
The IRS says private agencies can't take any type of enforcement action against you. The IRS itself keeps the legal authority to file a lien or issue a levy.
Can I set up a payment plan with the agency?
Yes. The IRS says the agency will work with you to set up a plan if you can't pay in full, without charging a setup fee. Payments still go to the IRS.
What if I'm not comfortable working with the agency?
You can ask in writing to have your account handled by the IRS instead. You can also get free or low-cost help from a Low Income Taxpayer Clinic or the Taxpayer Advocate Service.
Sources
- Internal Revenue Service (IRS), "Understanding your CP40 notice". irs.gov
- IRS, "Private debt collection". irs.gov
- IRS, "Private debt collection frequently asked questions". irs.gov
- IRS, "Private debt collection: Accounts assigned to private collection agencies". irs.gov
- IRS, Publication 4518, What You Can Expect When the IRS Assigns Your Account to a Private Collection Agency. irs.gov
- IRS, Publication 594, The IRS Collection Process (Rev. 1-2026). irs.gov
- IRS, "How to know it's the IRS". irs.gov
IRSV.com is an independent guide and is not affiliated with the IRS. This page is general information, not tax or legal advice. Rules change; confirm details on IRS.gov or with a tax professional. Found an error? Tell us.