If you’re grappling with IRS debt, you might be surprised to learn that the IRS sometimes enlists private collection agencies (PCAs) to help recover unpaid taxes. One of these agencies is CBE Group, Inc., a private company authorized by the IRS to collect certain overdue tax debts.
This practice has been in place since 2018 through the IRS Private Debt Collection (PDC) program, which aims to recover unpaid taxes from individuals facing challenges in settling their obligations.
This guide explains how CBE operates, what to expect, and your rights when dealing with them. If CBE has contacted you, it’s important to stay informed about their role in IRS collections and understand your rights to ensure you’re treated fairly. Read on to learn what CBE can and cannot do. Then, discover how you can protect yourself and possibly negotiate for a solution that works for you.
For immediate assistance in resolving your IRS and unpaid tax issues, contact Wiggam Law. We are here to provide the guidance and support you need to achieve tax relief. Call 404-609-1300 or use our scheduler for a free consultation.
Who Is CBE Group, Inc.?
CBE Group, Inc. is a private debt collection agency contracted by the IRS under the Private Debt Collection (PDC) program. CBE’s primary function is to assist the IRS in recovering unpaid tax balances that the IRS has chosen to transfer to private firms.
They operate under strict rules from the IRS to ensure taxpayer rights are respected and collections are managed responsibly.
While the IRS authorizes CBE Group to contact you and discuss repayment, they do not have enforcement powers. This means they cannot take actions like:
- Tax levies: Freezing or seizing money from your bank account.
- Tax liens: Placing a claim on your property to secure the debt.
- Wage garnishments: Deducting a portion of your wages directly from your paycheck.
- Asset seizures: Taking your property, such as your car or home, to satisfy the debt.
If you’re dealing with CBE, know that they must follow IRS guidelines and are prohibited from harassment or other aggressive collection tactics. If a collection agent threatens you with these types of actions, they are not in line with their IRS agreement and are likely violating the Fair Debt Collection Practices Act (FDCPA).
How the Process Works: What to Expect
The process begins when the IRS sends you a letter, known as a CP40 notice. This letter serves as official notification that your account has been assigned to a third-party collection agency, such as CBE Group. This letter will include the information you need to verify the legitimacy of the assignment and explain what’s coming next.
Once CBE receives your account, they will reach out, typically by letter or phone. Their communications should align with IRS Publication 4518, which outlines how CBE should interact with taxpayers.
You can expect CBE to provide clear information on your debt and potential options for resolving it. If you have concerns or questions, remember that the IRS and CBE are required to inform you of your rights at every step.
What Powers Does CBE Group Have?
It’s critical to understand what CBE can and cannot do. Unlike the IRS, CBE has limited powers. They cannot enforce actions such as garnishing your wages, seizing assets, or placing liens on your property—only the IRS has that authority.
CBE Group’s role centers on communication and negotiation. They are authorized to reach out and discuss payment options to help you resolve your outstanding tax balance. This might include:
- Discussing repayment options: CBE can outline ways to pay down your debt, such as paying in full or breaking it down into manageable payments over time.
- Setting up installment agreements: If paying your debt in a single lump sum isn’t possible, CBE can work with you to establish an installment agreement, allowing you to pay off your debt in monthly installments. Keep in mind, however, that this agreement is still subject to IRS guidelines and approval, and CBE cannot alter the terms set by the IRS.
- Relaying information: CBE’s communications are essentially a continuation of IRS efforts to collect your debt, and they are required to follow IRS protocols, including respecting taxpayer rights and providing verification of the debt upon request.
CBE’s role is solely to discuss payment options and help establish installment agreements when possible. Their primary power lies in communication: they can inform you of the debt, outline payment options, and facilitate arrangements for paying off your outstanding balance.
How to Deal with CBE Group, Inc.
If you’ve been contacted by CBE Group, here are some practical tips for managing the situation effectively.
1. Confirm Legitimacy Before Sharing Personal Information
Before providing any personal or financial information to CBE, make sure you’re truly dealing with a legitimate representative of CBE Group. Here’s how:
- Look for the CP40 notice from the IRS, which will inform you if your account has been transferred to CBE.
- Cross-check the contact information provided by CBE with what’s listed on the IRS’ website or call the IRS directly to confirm.
- If you have any doubts, ask CBE to send a written verification of your debt and their involvement.
- Note the ID verification code on the CP40 notice.
- When you talk with CBE, have them give you their portion of the verification code.
Taking these steps can prevent you from falling victim to potential scams or miscommunication and ensure that you’re speaking with an authorized representative.
2. Keep Records of All Communication
Document every interaction you have with CBE, whether by phone, email, or mail. This can include:
- Recording dates and times of calls, who you spoke with, and what was discussed.
- Saving letters or emails you receive from CBE.
- Noting payment arrangements discussed, including terms and deadlines.
Maintaining detailed records is a powerful tool if any disputes or discrepancies arise. Documenting your conversations can protect you and make clarifying or adjusting any agreements easier if needed.
3. Direct All Payments to the IRS or U.S. Treasury
Even though CBE manages your account, sending any payments directly to the IRS or U.S. Treasury is crucial—not to CBE. Here’s why:
- CBE is authorized only to facilitate payments, not to collect funds themselves. Sending payments directly to the IRS ensures they’re properly credited to your account.
- Always use IRS payment methods, such as paying online via the IRS Direct Pay system, mailing a check to the appropriate IRS address, or arranging payments through IRS-approved electronic options.
This extra step adds a layer of security, ensuring your payments reach the IRS without any risk of misallocation.
4. Understand Payment Options Through CBE
CBE can help you set up a payment plan, such as an installment agreement, to break down your debt into manageable monthly payments. When considering this option:
- Confirm the terms carefully. Before agreeing to the plan, make sure you fully understand the payment amounts, due dates, and terms.
- Keep records of the installment agreement and any related documents provided by CBE.
It’s also important to remember that even if CBE assists in setting up your payment plan, all payments should go directly to the IRS using the methods outlined above.
5. Stay Cautious with Personal Information
Generally, be cautious about sharing sensitive personal information, such as your bank account details and Social Security number, over the phone. If you’re in doubt, request verification or a secure way to share information. Never give out financial details unless you know CBE’s legitimacy and need for that information.
Being proactive and cautious can help make your interactions with CBE smoother and prevent potential issues down the line.
How to Have Your Case Sent Back to the IRS
In some situations, you may want to request that your case be returned to the IRS, especially if you’re experiencing financial hardship or have a legitimate dispute about the debt.
The collection agency must return your case to the IRS if you request it in writing. Use the contact details that you see on your placement letter from CBE, and send a letter saying that you want to work directly with the IRS.
Returning your case to the IRS can offer additional options, such as exploring financial hardship exemptions, payment reductions, or other relief programs. Consult with a tax attorney to determine the best path forward if you’re considering this step.
What Rights Do You Have?
When dealing with a private collection agency like CBE Group, you need to know your rights. As a taxpayer, you’re protected under several laws, ensuring fair treatment and transparency in debt collection. Here’s an overview of your rights so you can navigate any interactions with CBE confidently and without fear of mistreatment.
Your Rights Under the Fair Debt Collection Practices Act (FDCPA)
The Fair Debt Collection Practices Act (FDCPA) is a federal law that protects consumers from abusive debt collection agencies and governs how they operate.
Under the FDCPA, CBE Group, like any private collection agency, must adhere to strict guidelines in how they communicate with you and handle your account. Here are some key protections you have under the FDCPA:
- Right to verification of debt: You have the right to request written verification of the debt CBE is collecting. This verification should include the amount owed, the creditor’s name (in this case, the IRS), and an itemized explanation if needed. This step helps ensure that the debt is accurate and legitimately owed.
- Freedom from harassment or abuse: CBE must conduct themselves professionally, without using abusive language, threats, or any form of harassment. Repeated or overly aggressive communication, calls at inconvenient hours, or harassment in any form is prohibited by the FDCPA.
- Protection from false or misleading statements: CBE cannot misrepresent itself, your debt amount, or its authority. It must be transparent about who it is, the amount owed, and its role in the collection process. It cannot claim to have enforcement powers like the IRS, such as levying bank accounts or seizing property.
If you believe CBE has violated any of these rights, you have the option to file a complaint with the Consumer Financial Protection Bureau (CFPB) or the IRS, and seeking assistance from a tax attorney can provide additional support in these situations.
Taxpayer Bill of Rights: Additional Protections
The IRS provides its own set of taxpayer protections through the Taxpayer Bill of Rights, which outlines your rights when dealing with tax issues, including interactions with private collection agencies. Key rights include:
- Right to be informed: You have the right to clear and accurate information regarding your debt, including why it’s owed, how much is owed, and any applicable options for repayment. CBE is obligated to inform you accurately and provide documentation upon request.
- Right to quality service: Just because you’re dealing with a private agency doesn’t mean your treatment should be anything less than respectful and professional. CBE must provide courteous service, answer your questions clearly, and treat you fairly.
- Right to privacy and confidentiality: Your financial details are sensitive, and the IRS requires CBE to safeguard your personal information. CBE cannot share or misuse your information and must handle your case confidentially.
- Right to challenge or appeal: If you believe there’s an error in the debt amount or if you disagree with the debt itself, you have the right to challenge it. You can contact the IRS directly to review your case, and CBE must respect this process without pressuring you to pay while a dispute is ongoing.
- Right to pay only what you owe: You are not obligated to pay any amount beyond what the IRS has assigned to CBE for collection. CBE should not tack on additional fees or costs to your debt.
If you feel that CBE is not respecting these rights—whether through harassment, lack of transparency, or misuse of your personal information—consider seeking legal advice.
A tax attorney can help you ensure that your rights are upheld, verify your debt, and provide support in managing the collection process in a fair and respectful way.
Common Issues and How to Handle Them
If CBE Group, Inc. is handling your IRS debt, you may face some common issues. Here’s a quick guide on how to address them effectively:
1. Can’t Afford to Pay the Debt
If you’re unable to pay the debt in full, there are options:
- Installment Agreements: CBE can help set up a monthly payment plan to spread out the payments over time.
- Offer in Compromise (OIC): In cases of significant financial hardship, you might qualify for an OIC, allowing you to settle for less. This option requires working directly with the IRS.
- Currently Not Collectible (CNC) Program: If you truly cannot pay, the IRS can mark your account as CNC, pausing collection efforts.
A tax attorney can help assess these options and represent your case to find the best solution for you.
2. Negotiating Payment Agreements or Going Directly to the IRS
If CBE’s payment terms don’t fit your financial situation, you can contact the IRS to explore more flexible options, like reduced payments through a partial payment installment agreement. This may involve negotiating directly with them for more flexible payment terms. For complex cases, a tax professional can guide you and negotiate directly with the IRS on your behalf.
3. Receiving Improper Notices or Facing Harassment
If you receive inaccurate notices or feel harassed by CBE, here’s what you can do:
- Request verification of debt: Ask CBE to confirm the debt details in writing if you spot inconsistencies.
- File a complaint: If CBE violates your rights through excessive contact or intimidation, you can report this to the Consumer Financial Protection Bureau (CFPB) or the IRS Taxpayer Advocate Service.
Guidance can make handling these issues easier. At Wiggam Law, we can help you navigate these challenges, communicate with CBE, and ensure your rights are protected every step of the way.
Understanding Your CP40 Notice
Receiving a CP40 notice can be unsettling, but it simply means your unpaid tax debt has been assigned to a private collection agency, such as CBE Group. The CP40 notice explains what steps to take next and provides information on verifying the agency’s legitimacy.
It’s crucial to read this notice carefully, as it’s the IRS’ official document informing you of the debt transfer. If you receive a CP40, take it as an opportunity to review your options and reach out to a tax professional who can guide you through the process.
Need Help Dealing with CBE?
Dealing with IRS debt is challenging, but understanding how to work with CBE Group can make the process more manageable.
If you find yourself struggling or have questions, reaching out to the IRS or a tax attorney can be invaluable. Here at Wiggam Law, we’re committed to helping taxpayers find solutions to their IRS issues with compassion and expertise.
Don’t hesitate to contact us for personalized assistance in navigating your tax debt journey. Call (404) 233-9800 or use our scheduler for a free consultation.