What Is IRS Notice CP140 and How Should You Respond?

Understanding Your CP140 Notice

Receiving a CP140 notice from the Internal Revenue Service signifies that your overdue business tax account has been transferred to a private collection agency (PCA). Individual taxpayers with overdue accounts receive a similar notice, the CP40. This action typically occurs after the IRS has made several unsuccessful attempts to contact you and collect the outstanding balance. The notice is not a bill from the IRS itself, but an official notification that a third-party is now assigned to manage the collection of your debt.

The CP140 will name the specific PCA assigned to your account and list the total amount of tax, penalties, and interest you owe. The letter also contains a unique 10-digit Taxpayer Authentication Number. This number is used in a two-party verification process to protect you from scams; you will provide the first part of the code to the agent, and they will provide the second part to confirm their identity.

Before contacting anyone, you should confirm that the collection agency is legitimate. The IRS maintains a public list of the PCAs it contracts with on its official website, IRS.gov. The currently authorized agencies are CBE Group, Coast Professional, Inc., and ConServe. You will also receive a separate, initial contact letter directly from the assigned PCA, which should contain the same authentication number as your CP140 notice.

Responding if You Agree with the Notice

Once you have verified the legitimacy of the CP140 notice and the private collection agency, the next step is to contact the agency to resolve the debt. The PCA’s contact information will be printed on the notice. The collection agency is authorized to work with you to establish a payment arrangement if you cannot pay the full balance immediately. These private collectors can set up installment plans that may extend for up to six years.

Even though you are dealing with a PCA, all payments must be made directly to the U.S. Treasury. An agent asking for payment to be made to them or their company is a major red flag of a scam. Payments can be submitted online through IRS Direct Pay or by check, and the agent can guide you through those official processes.

If you sent a payment to the IRS before your account was assigned to the PCA, allow time for it to be processed. You should still communicate with the collection agency to inform them that a payment was made and to confirm it has been properly credited to your account once it clears. Maintaining open communication with the PCA is important to ensure your account is correctly handled.

Responding if You Disagree or Cannot Pay

If you dispute the amount of tax owed or believe your account was assigned to a PCA in error, you must take specific steps. Certain situations, such as being a victim of identity theft, being deceased, or having an income below 200% of the federal poverty line, should prevent an account from being sent to a private collector. If you fall into a protected category or disagree with the tax liability, you should contact the PCA to have the account returned to the IRS for resolution.

For taxpayers who agree with the debt but cannot afford the payment plans offered by the PCA, more complex relief options are available only through the IRS. These include programs like an Offer in Compromise (OIC). To pursue an OIC, request penalty abatement, or be placed in Currently Not Collectible status, you must formally request in writing that the PCA return your account to the IRS.

The private collection agency cannot process these applications or grant this type of relief. Their role is limited to collecting payment on the existing debt and setting up basic installment agreements. Once your account is back with the IRS, you can submit the necessary forms, such as Form 656 for an OIC.

Consequences of Not Responding

Ignoring a CP140 notice and the subsequent communications from the assigned private collection agency will not make the tax debt disappear. While the PCA itself cannot take legal action like seizing your assets, its failure to collect will lead to your account being returned to the IRS. Once the account is back with the IRS, the agency can escalate its collection efforts significantly.

One of the first actions the IRS may take is filing a Notice of Federal Tax Lien. A lien is a public legal claim against all your current and future property, including real estate and personal property. It secures the government’s interest in your assets and can severely damage your credit, making it difficult to obtain loans or sell property.

If a lien does not prompt payment, the IRS can proceed with a levy. A levy is the actual seizure of your assets to satisfy the tax debt. This can include garnishing your wages, taking money directly from your bank accounts, or seizing and selling your vehicles or other property.