What Is IRS Notice CP40?

A CP40 notice means the IRS has assigned your overdue tax account to one of its authorized Private Debt Collection (PDC) agencies. Under a program authorized by Congress, the IRS contracts with private collection firms to work certain tax debts that would otherwise go uncollected — typically older debts that the IRS's own collection resources haven't resolved.

After receiving the CP40, you'll be contacted by the assigned private collection agency (the IRS authorizes specific firms, currently including CBE Group, Coast Professional, and Performant Recovery). The agency will identify itself, explain the debt, and discuss payment options with you. Importantly, the private agency can help you set up payment plans, but it cannot levy your assets, file liens, or take any of the more aggressive collection actions available to the IRS directly.

Because IRS impersonation scams are common, it's important to verify any contact you receive. A legitimate private collection agency working for the IRS will: send a letter confirming the assignment before calling, not demand payment by gift card, wire transfer, or cryptocurrency (only checks payable to the U.S. Treasury or IRS are legitimate), and be willing to provide IRS documentation confirming the assignment. The IRS also sends a separate letter (Notice 1450) confirming the assignment around the same time as the CP40.

If you receive a CP40 and you can pay the debt or set up a payment arrangement, do so promptly — the private agency has the same authority to report to credit bureaus that the IRS has for federal tax liens, and an unresolved debt can affect your credit. If you believe the debt is incorrect or was already paid, contact both the agency and the IRS to dispute it. If the assigned agency isn't able to reach you or resolve the account, the IRS may take the account back and resume direct collection.