IRS Notice CP40: your account has gone to a private collection agency
The IRS has handed an unpaid balance to one of the private agencies it is required by law to use. The CP40 names the agency and gives you a number to verify them. Payments still go to the IRS, not to the agency.
THE CLOCK — NO NEW DEADLINE, BUT THE AGENCY WILL BE IN TOUCH
A CP40 does not add a new assessment or start an appeal window. It tells you which agency has the account. The agency sends its own letter next, and both letters carry a taxpayer authentication number used to confirm that you and the caller are who you each say you are.
Why the IRS uses private agencies
The IRS says the law requires it to use private agencies to collect certain outstanding, inactive tax debts. The statute defines inactive by reference to time: an account removed from active inventory, one not assigned to an IRS employee more than two years after assessment, or one assigned but with no contact for more than a year.
The CP40 is the IRS telling you your account is one of them, and which agency has it. The IRS names the agencies currently under contract on its private debt collection page, and that list is the one to check against. It changes when contracts change, so rely on the IRS page rather than a list copied elsewhere.
Confirming the agency is genuine
Because a real CP40 leads to real phone calls from a non-government company, this is fertile ground for impersonators. The protections are specific and worth using every time.
THE LEGITIMACY CHECKLIST
- You receive the IRS's CP40 first, then a letter from the agency. A call with no letters before it is a warning sign
- The agency named on the call matches the one named on your CP40 and on the IRS private debt collection page
- Both letters carry a taxpayer authentication number, and you exchange parts of it with the caller to verify each other
- Payment goes to the IRS, through its payments page or a check payable to the United States Treasury, never to the agency
- Your IRS account transcript shows the assignment, which the IRS suggests checking
The IRS says the agencies will not threaten you. If one does, or you are unsure a caller is genuine, stop the call and contact the IRS through irs.gov.
What the agency can and cannot do
The statute lets a contractor locate and contact you, ask for payment in full, offer an installment agreement that pays the balance in full within a set period, and obtain financial information the IRS specifies. The IRS says the agency will work with you to set up a payment plan if you cannot pay in full.
The contract must prohibit the agency from doing anything IRS employees are prohibited from doing in similar work. The IRS says the agency must respect your taxpayer rights and follow the law.
The agency is not the place to dispute the balance or to pursue an offer, a partial payment agreement or hardship status. Those are IRS decisions. If you need one of them, or the account is one the law says should not have been assigned, contact the IRS directly.
Accounts that should not have been assigned
The statute keeps certain accounts out of private collection altogether: those covered by a pending or active offer in compromise or installment agreement; innocent spouse cases; taxpayers who are deceased, under 18, in a designated combat zone or identity theft victims; people whose income is substantially all Social Security disability or Supplemental Security Income; and individuals with income at or below a multiple of the poverty level the IRS applies. Accounts under examination, litigation, criminal investigation, levy or appeal are also excluded.
If one of those describes you, tell the IRS directly rather than the agency.
Nothing about the assignment changes the underlying balance or the ten-year collection period. The account transcript is still the place to find out what is owed and for how long.
Where this comes from
The statutes behind this page, so you can check any of it rather than take it on trust.
- IRC §6306(c)
- Requires the IRS to use qualified private collection contracts for inactive tax receivables, defined by reference to how long an account has gone without assignment or contact.
- IRC §6306(b)
- Defines what a contractor may do: locate and contact the taxpayer, request full payment, offer an installment agreement for full payment within a set period, and obtain financial information.
- IRC §6306(d)
- Lists accounts that may not be assigned, including those under an offer or installment agreement, innocent spouse cases, deceased taxpayers, identity theft victims, and some low-income and disability cases.
This page explains what the IRS or the Massachusetts Department of Revenue does and cites the statute. It is not advice about your situation, which depends on facts none of this knows. Tell us what your letter says and what date is on it. Please do not send Social Security numbers or tax documents through the form.
Is this IRS letter real?
The IRS almost always starts with a letter in the mail, and a genuine letter can be checked without using anything printed on it. The fastest check is your own IRS Online Account, which shows the same balances and notices the IRS holds.
Spotting a tax relief scam
The FTC and the IRS publish the same warning signs: a promise to settle for a fraction before anyone has looked at your finances, a fee demanded up front, and mail dressed up to look official. The free checks come from the IRS itself.
Installment agreement
A monthly payment plan under section 6159. Below certain balances it is close to automatic and requires no financial disclosure at all; above them it becomes a negotiation about what you can afford.
Collection statute (CSED)
The IRS has ten years from assessment to collect, after which the balance becomes unenforceable. The period is regularly suspended, and almost every real account has a date later than ten years from the return.
Questions about notice cp40.
- Is a CP40 notice real?
- Genuine CP40s exist and arrive by mail from the IRS. The IRS says it sends the CP40 first, then the agency sends its own letter, and both carry a taxpayer authentication number. Check the agency's name against the IRS private debt collection page.
- Do I pay the private collection agency?
- No. Payment goes to the IRS, through its payments page or by check payable to the United States Treasury. The agency can set up a payment plan with you, but the money is paid to the IRS.
- Can the agency set up a payment plan?
- Yes. The IRS says the agency will work with you to set up a payment plan if you cannot pay in full when contacted. The statute limits contractors to agreements that pay the balance in full within a set period.
- Why was my account sent to a private agency?
- The IRS says the law requires it to use private agencies for certain inactive tax debts. The statute defines inactive by time: no assignment to an IRS employee long after assessment, or a long gap without contact.
- Can I ask for my account to go back to the IRS?
- If your account falls into a category the statute excludes, such as a pending offer or installment agreement, identity theft, or income substantially all from disability benefits, tell the IRS. For resolutions only the IRS can grant, deal with the IRS directly.
Tell us what the letter says and what date is on it.
Scope and price in writing before anything starts. Where what you need is something we do not do, you will be told that instead.
Please don't send Social Security numbers or tax documents through this form.