What could go wrong that hasn’t already?

Everyone’s favorite government agency, particularly during the month of April, the Internal Revenue Service, is taking another step down into the dungeon on the likability scale, if likability and the IRS could reside in the same sentence. In this instance it’s not totally the IRS’ fault, it’s just following the congressional orders of its bosses. Hidden in a $305 billion highway bill was a small provision that required the IRS to outsource some of its debt collection.

What’s wrong with that, after all, about 14 million taxpayers owe the government $138 billion and members of Congress want to see how much of that sum outside firms can collect. According to the congressional Joint Committee on Taxation they feel the outsourcing could, in 10 years time, collect $2.4 billion.

There are a few problems, however. Four firms were selected for the task, CBE Group, ConServe, Performant and Pioneer Credit Recovery. The Consumer Financial Protection Bureau is suing Navient, of which Pioneer Credit Recovery is a unit, for botching student debt recovery. The company was fired two years ago by the Education Department.

This is not the IRS’ first outside collection rodeo. The agency tried it, according to The New York Times, in 1996 and 2006, both attempts failed and ended up costing the agency more money than it collected. But the real worry comes in the method of collection. The four companies will contact taxpayers who owe the IRS by telephone, and while taxpayers will have received notices by mail, not only from the IRS but also from the collection firms, there is nothing to ensure that the person on the other end of the line is actually working for the IRS or is just another scammer.

These scam artists already employ numerous schemes to separate their marks from their money. They have impersonated law enforcement officers over the phone, claiming to have a relative in custody and demanding immediate bail money. They are already sending fake IRS emails that look legitimate demanding payment, and some are using phone robo calls to dupe the unsuspecting. Now this move by the IRS opens the door wide for abuse and there is only one way for consumers to counter and protect themselves.

Clark Howard, the Atlanta radio advice guru, gave the best counsel for handling this situation: “Even if you know you owe a debt to the IRS and you get contacted by a supposed outside bill collector, do not talk to them,” he said.

Even the IRS recognizes the possibility of scam artists using this new collection method as an opportunity. In announcing the private collection the IRS states on its website: “Whether or not a taxpayer’s account is assigned to a private collection agency, the IRS warns taxpayers to beware of scammers pretending to be from the IRS or an IRS contractor,” and advises them to look out for what it says, “IRS and its contractors will never do.”

▪  Call to demand immediate payment using a specific payment method such as a prepaid debit card, gift card or wire transfer.

▪  Threaten to immediately bring in local police or other law enforcement groups to have the taxpayer arrested for not paying.

▪  Demand that taxes be paid without giving the taxpayer the opportunity to question or appeal the amount owed.

▪  Ask for credit or debit card numbers over the phone.

If you owe the IRS money, contact them directly and make arrangements to pay.

If you believe you’ve received a call from a scammer claiming to be an IRS contractor, report it to the Treasury Inspector General for Tax Administration at 800-366-4484 or Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. In the notes section, add, “IRS Telephone Scam.” And finally, report any unsolicited email claiming to be from the IRS, or an IRS-related component like the Electronic Federal Tax Payment System, to the IRS at phishing@irs.gov.

This story was originally published April 26, 2017 at 9:00 PM with the headline "What could go wrong that hasn’t already?."