Pioneer is Calling About An IRS Debt?
If you have received a call from Pioneer about an IRS tax debt, you may be alarmed. You should be alarmed. Only the IRS collects taxes, right? Furthermore, the IRS never calls about tax debts, right? Wrong. That call from Pioneer was likely a legitimate collections call from a very large and powerful debt collections company. Starting in 2017 and with the IRS’s approval, Pioneer is calling about IRS tax debts in delinquent collections status. But there are also scammers calling, as both Pioneer and IRS imposters. No matter what, if you owe back taxes to the IRS, you must take these calls as a very serious matter.
Who is Pioneer Credit Recovery?
Pioneer Credit Recovery, Inc, based in New York, is a big debt collection agency. How big? They have over 1000 employees, are traded on the NASDAQ, and have offices in Florida, New Jersey, and Indiana. Pioneer’s website says they are a leading provider of government collections and have a wealth of experience in non-tax government collections. That non-tax part is changing because the IRS is outsourcing tax collections to private collection agencies and they got one of the four contracts.
The IRS normally brings in $4 for every $1 put into its budget. But the private collectors don’t appear to be as effective as their government counterparts. From Oct. 2017 to Sept. 2018, the program’s most profitable 12 months, collection companies Pioneer Credit Recovery, ConServe Debt Recovery, Performant Recovery, and CBE Group collected just $2.64 for every $1 the government spent on the program.
Pioneer’s Dubious Track Record
Pioneer’s trademark is “Performing Beyond® in Government Collections.” They live up to that slogan too. In 2014 the Navient, which owns Pioneer, paid $97 million to settle allegations by the federal government that it overcharged military service members.
In 2015 the U.S. Department of Education announced was canceling its contract with Pioneer to collect on student loans because Pioneer made “materially inaccurate representations” to struggling borrowers. About which US Representative Chris Collins, who represents the district in which Pioneer Credit Recovery operates, told The Buffalo News that “the decision to end the contract would lead to the loss of about 400 jobs at the company.”
It appears with the new contract to collect taxes for the IRS, Pioneer is getting those jobs back.
According to the Buffalo (NY) Business Journal:
U.S. Sen. Charles Schumer of New York, announced that ConServe and Pioneer Credit Recovery in Wyoming County were each awarded federal contracts to collect unpaid taxes for the Internal Revenue Service. Schumer said the contracts are expected to generate 600 new jobs…”
Pioneer is now a private IRS Tax Collection Agency
The 2015 FAST Act now authorizes the IRS to outsource tax collections to private debt collection companies, and this is going to be a game changer for anyone owing tax – and also those who may not owe tax to the IRS at all.
By the way, the last time the IRS tried outsourcing tax collections to private collection agencies it lost money.
Other companies that may call you about IRS taxes:
- CBE Group, authorized IRS debt collector
- ConServe, authorized IRS debt collector
- Performant, authorized IRS debt collector
1) The IRS must send you a letter to your last known address, notifying that your past due account is now with a private collection agency, in this case, Pioneer Credit Recovery.
2) Pioneer must mail you a collections letter to the same address, notifying you Pioneer Credit Recovery is now collecting on your IRS account.
3) If your last known address is out of date and you don’t receive mail from the IRS or Pioneer, you are still considered “legally notified” and Pioneer may proceed with collections.
4) Pioneer will begin calling you regarding your IRS taxes, and will likely send you further demands for payment in the mail to your last known and any newly discovered addresses.
If Pioneer is Calling You About IRS Taxes, Should You Answer?
If you owe taxes and can pay them, you should. Whether or not you should trust a call out of the blue about IRS taxes is a different matter. The IRS has said to never trust such a call because that isn’t how the IRS operates. The only calls about IRS taxes in recent years have been from scammers. The IRS estimates that over $23,000,000 has been stolen from taxpayers in recent years by phone call scams about IRS taxes. This is setting up to be an interesting conflict of interests and policies for the IRS and for Congress.
Speaking of Congress, since this was enacted four senators sent a letter to Pioneer Credit Recovery because of what their agents say and how they train their agents and other abuses when Pioneer Credit Recovery is calling regarding IRS debts. Read more there.
Action! Steps if Pioneer Called about IRS Taxes
First, beware of scams. DO NOT give your social security number or payment info of any kind over the phone, ever. If you have a CPA and have filed your tax returns, and this is a surprise, start there. If this is a surprise and you don’t know what to do, you might talk to a tax relief company. They can and should verify, for free, if you owe back taxes to the IRS, and can advise on your options.