In early December, the IRS will announce the official start of the 2018 tax season, designating the date the bureau begins processing electronic tax returns. The related press release will also include the filing deadline for submitting 2017 tax returns. The traditional April 15 deadline falls on a Sunday in 2018, so the closing time is expected to be extended to midnight, Monday or Tuesday, April 16 or 17 to coincide with the weekday operations of the US Postal Service.
Acknowledging another US tradition — well-intentioned consumers planning to pay down debt using their tax refunds — companies with delinquent customers would be well served by implementing an effective tax season debt collection strategy because some experts believe they can achieve returns on investment of 20 – 30 percent.
Such a plan, however, should be in place long before consumers start receiving refunds. Consequently, companies contracting a qualified debt collection agency to design an individualized tax season strategy in Q4 are best positioned to receive the maximum return on investment.
Best-in-Class Agencies
Companies interested in a tax season debt collection strategy should limit their search to agencies valuing commitment, leadership, accountability, teamwork and philanthropy. These attributes provide a moral compass that guides them through the various functions of collections and mandates a continuum of respect for clients, consumers and employees at all times.
Best-in-class agencies maintain uncompromising standards of excellence that form a solid foundation during tax season and beyond:
Compliance with state and federal laws including the Fair Debt Collection Practices Act (FDCPA), Fair Credit Reporting Act (FCRA) and Telephone Consumer Protection Act (TCPA).- A compliance and quality assurance department led by a legal team and ACA Certified Credit and Collection Compliance Officers conducting year-round training and assessment.
- Certification — SSAE 16 SOC I Type II audited financial reporting and a Professional Practices Management System (PPMS) by ACA International.
- Security — Payment Card Industry Data Security Standard PCI DSS 3.2, compliance with SSAE 16 SOC I Type II, and tight house policies such as employee background checks and drug screenings.
- Technology — Revenue recovery technologies, workflow automation, interactive voice response (IVR), the latest telephony, electronic payment processing and more.
All of these measures enable agencies to achieve outstanding collection results and foster an optimum level of brand protection for their clients.
An Effective Tax Season Debt Collection Strategy
Tax season is the most exuberant time of year for operations managers at debt collection agencies. As one director framed it: “Tax season is our Super Bowl.”
These savvy veterans are fully aware that an effective tax season strategy is capable of recovering a significant amount of debt during the short window when consumers have the ability and willingness to pay. Such strategies involve:
- Developing a well-planned strategy that considers the latest compliance and consumer trends as well as local and national economic factors.
- Conducting the proper consumer outreach and collector briefings at the close of the previous year and incentivize consumer repayments throughout tax season.
- Increasing the acceptance of settlements during tax season when consumers are committed to paying down their debt.
- Implementing real-time adjustments to large segments or individual accounts with the help of strategic predictive analytics as a function of economic conditions, consumer trends or the results of consumer satisfaction surveys.
- The ability to handle greater call center volume during tax season.
Getting Help
Best-in-class agencies with well-planned tax season strategies are superior to in-house collection efforts. Above and beyond the expense of launching a collections department, maintaining the latest data security and 
technology, and monitoring individual and team collections performance, inexperienced operations may result in costly litigation if compliance is not followed to the letter of the law.
Furthermore, managing an internal collections department often comes at the expense of diverting company focus away from its primary purpose and revenue streams.
Finally, many of these in-house collection liabilities are shared by agencies lacking a foundation of financial services experience in conjunction with compliance, certification, data security and technology. In an industry where there are few second chances, one collections blunder could cost a well-intentioned company millions of dollars in judicial penalties and fees if it partners with the wrong agency.
Contact us today to learn about “definitive debt collections” and how an individualized tax season debt collection strategy can help your organization.
