Outside Collectors for I.R.S. Are Accused of Illegal Practices
The call scripts those agencies are using — obtained by a group of Democratic senators
and reviewed by — shed light on how the tax agency’s new fleet of private debt collectors extract payments from debtors.
Pioneer, a subsidiary of Navient, was effectively fired two years ago by the Education Department from its contract to collect overdue student loan debt after the agency determined
that it gave borrowers inaccurate information about their loans at “unacceptably high rates.” Pioneer was sued this year by the Consumer Financial Protection Bureau, which said it “systematically misled” borrowers.
— CBE Group, ConServe, Performant Recovery and Pioneer — tell debtors
that they can set up an installment plan lasting as long as seven years, two years longer than the span that private collectors are legally allowed to offer.
Three of the agencies instruct debtors that “extra payments or higher payments can be accepted at any time.”
That kind of “give us anything you can” approach is common among consumer debt collectors,
but the government has typically been more measured, weighing what is owed against what the taxpayer can reasonably afford.
to hire outside collectors says that they may offer taxpayers installment agreements that cover “a period not to exceed five years.”
said that payment plans lasting longer than five years were legal as long as they were approved by the agency.
The Internal Revenue Service hired four outside debt collection firms to pursue overdue tax payments.
The agency “is committed to running a balanced program
that respects taxpayer rights while collecting the tax debts as intended under the law,” said Cecilia Barreda, an I. R.S.
