In a prior post, we highlighted the new collection efforts the Internal Revenue Service would be allowed to employ as a result of an infrastructure funding bill passed last year. We noted that private debt collection companies could be calling to pursue past due tax bills.
Indeed, there were certain specific, yet limited, types of debt that private debt collectors would pursue. However, legislators are becoming quite concerned about the tactics used in these efforts. According to a recent accountingtoday.com report, four senators have written a letter to one of the companies contracting with the IRS regarding its tactics.
Senators Elizabeth Warren (D-Mass.), Sherrod Brown (D-Ohio), Jeff Merkely (D-Ore.) and Benjamin Cardin (D-MD.) penned a letter to Pioneer Credit Recovery and its parent company Navent after complaints arose regarding employees reportedly advised consumers to liquidate 401(k) accounts to pay off past tax debt. The senators were also concerned that consumers were advised to take out second mortgages to do the same.
The scripts Pioneer’s employees are instructed to follow are potentially dangerous because they show little separation between methods used by scammers to separate consumers from their money. Taking out second mortgages, using credit cards and other means of borrowing money are especially troubling because they often leave consumers financially devastated.
The story is a reminder of why it is important to have tax issues addressed by an experienced tax law attorney. A skilled lawyer can properly question the legality of certain tax debts and advise you on the best ways to resolve them.
The preceding is not legal advice.