The Internal Revenue Service announced the official start of the 2016 tax season on Monday, January 23 by unlocking the doors to its virtual storefront and accepting the first electronic tax returns. The agency anticipates processing over 153 million returns this year with an estimated 80% of the total generated by tax preparation software. Meanwhile, top-tier debt collection agencies are helping clients increase ROI up to 30% using a tax season debt collection strategy.
Over 70% of people filing individual returns will receive refunds according to IRS data while nearly 35% of consumers (45% of “young consumers”) expecting tax refunds say they will settle their debt with the money per the National Retail Federation’s most recent Tax Return Survey.
Rolling Out a Tax Season Debt Collection Strategy
Top-tier agencies are successful at year-round debt recovery by maintaining full legal compliance and certification while offering clients the finest data security, technology and brand protection, but they understand that a dedicated tax season debt collection strategy is necessary to reach and broker deals with consumers when they have the means to pay. Such strategies involve:
Preparedness — Develop an effective strategy as a function of the latest compliance, consumer trends and macroeconomic conditions.
Timing — Conduct consumer outreach and collector briefings in quarter four, and incentivize repayments through quarter one and into quarter two.
Flexibility — Increase settlement flexibility during tax season in response to consumers’ expressed interest in paying down their debt.
Modification — Apply real-time adjustments to individual negotiations as well as entire segments as a function of consumer trends, feedback from consumer surveys, and economic conditions.
Qualified agencies with a tax season debt collection strategy offer many advantages over in-house efforts. The DIY startup and operating costs are huge, and the lack of experience can be debilitating if it results in legal action by consumers.
Led by executive management teams boasting decades of experience, those agencies also offer in-house skip tracing and legal teams, diplomatic consumer relations and the ability to handle greater call center volume during tax season.
All of these factors provide clients with excellent returns on investments and improved customer retention.
Download our free guide about tax season strategies to learn how Optio Solutions can help your organization.