Nicholas Hartney EA Blog Nicholas Hartney, Licensed to Represent Taxpayers before the IRS | Snapshot of Current Tax Issues| Genesis Tax Consultants, LLC
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Nick's Tax Snapshots

Nicholas Hartney, Licensed to Represent Taxpayers before the IRS | Snapshots of Current Tax Issues

Pioneer Credit Recovery, CBE, ConServe, or Performant calling regarding a IRS tax bill?

Back in April the IRS began to use private collection agencies for the collection of outstanding inactive tax receivables.  

As a condition of receiving a contract, these agencies must respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act.

The IRS contracts with four companies:

  • CBE Group
  • ConServe 
  • Performant 
  • Pioneer Credit Recovery

One of the companies, Pioneer Credit Recovery was effectively fired two years ago by the Education Department from its contract to collect a delinquent debt for misleading borrowers about their loans at what the department called "unacceptably high rates." 

Each company earns up to 25 percent of the delinquent back tax debt that they collect. 

This marks the second attempt that the IRS has outsourced collection of back tax debt, a function normally held by the Service itself.  Ironically, the government lost money in both attempts, losing $4.4 million due to its high amount of administrative costs. 

Many professionals, including national taxpayer advocate at the Internal Revenue Service, Nina E. Olson, have warned of the potential for abuse.  She wrote in a letter to Congress that the outsourcing of federal tax debt is "a bad idea" as "it disproportionately impacts low-income and other vulnerable taxpayers."  The previous two attempts to outsource led her to conclude that "the program undermined effective tax administration, jeopardized taxpayer rights protections, and did not accomplish its intended object of raising revenue."

If you need help with resolving a back tax matter please shoot me a quick email and I will be happy to advise you on the best strategies available to you. 

Nicholas Hartney, EA

Licensed to Represent Taxpayers Before the IRS