Whirled Musings

Across the Universe with Cosmic Connie, aka Connie L. Schmidt...or maybe just through the dung-filled streets and murky swamps of pop culture -- more specifically, the New-Age/New-Wage crowd, pop spirituality & religion, pop psychology, self(ish)-help, business babble, media silliness, & related (or occasionally unrelated) matters of consequence. Hope you're wearing boots. (By the way, the "Cosmic" bit in my moniker is IRONIC.)

Saturday, July 07, 2018

Uncle Scam uses Trump U-like 'persuasion" tactics on delinquent taxpayers

Sigh... once again we meet at the intersection of politix and Scamworld. A few days ago Salon.com ran a piece about the failings of the Trump administration's privatized delinquent income tax collection scheme. Unfortunately the private debt collection companies to whom the IRS outsourced have, thus far, cost the government millions more than they've brought in. And they have targeted the most vulnerable taxpayers with sleazy Scamworld ploys.

It's only fair to note, before we go any further, that the use of outside contractors to go after delinquent taxpayers
is not new and has been tried before (and has failed). As well, it has received support on both sides of the aisle -- and shame on every lawmaker, Republican or Democrat, who ever voted in favor of such a scheme. The point here is that the revival last year of this method of collecting delinquent taxes, which was part of the Trump administration's push to privatize tax collection, would seem to fly in the face of Trump's own man-of-the-people shtick, particularly regarding his previously expressed concerns for the tribulations of the over-taxed middle class.

The use of private for-profit thumbscrew operators is all in the service of that right-wing mantra, "smaller government," of course, and is also in keeping with the practice of awarding lucrative contracts to private companies. Win-win, if you're an oligarch or a friend of one. From the Salon.com article:
Under the terms of their contract with the IRS, the debt-collection outfits receive a 25 percent commission on whatever they collect. The four companies are CBE Group, ConServe [aptly named ~ CC], Performant Recovery and Pioneer. The IRS is owed hundreds of billions in past-due taxes.
Outsourcing debt collection also allows for sleazier collection tactics than IRS agents have traditionally been allowed to employ. For one thing, the privateers are allowed carte blanche to contact delinquent taxpayers by phone. While the IRS is busily warning consumers about tax-collection phone scams, the private debt collectors are employing tactics that are very similar to those of the scammers the IRS warns about. This of course leaves the door wide open to actual scammers who are working only for themselves. To help you distinguish between legal and illegal collection scams, the IRS offers this advice, which may or may not be helpful in determining if that caller or in-person visitor is legit or not.

In any case, what really struck my attention as fodder for this Whirled was this bit regarding the private debt collectors' m.o.:

The call scripts suggested that taxpayers should raid their 401(k) retirement funds, ask their employer for a loan, or put their tax debt on a credit card. In the case of an early withdrawal from a 401(k), the taxpayer could actually incur an additional federal tax liability in an effort to resolve back taxes.
That reads just like it's taken straight from the Scamworld playbook, doesn't it? Donnie John's Trump U hucksters used these ploys, as did, for that matter, the aggressive pushers of imprisoned serial scammer Kevin Trudeau's Global Information Network (GIN) MLM scheme, and its offshoots, back in the day. As have numerous other fraudsters...

Of course I understand that there is a fundamental difference between running a scam and making an attempt to collect a debt that is legitimately owed. If you're under legal obligation to pay a tax and you don't, there are consequences. But the point here is that private debt collectors, hired by a government agency, are being given free rein to mislead and harass people, in many cases making an already bad situation much worse, and that some of the strategies these collectors use are not only unethical, but may be only marginally legal -- and that these coercive-persuasion strategies are the same ones used by scammers to manipulate their marks into emptying their bank accounts.
One of my heroes,
Senator Elizabeth Warren (D-Mass.), has (along with several other Democratic notables) been on the private tax collection issue for over a year now, having written to the Federal Trade Commission (FTC) about those phone scripts. I applaud Senator Warren. She is actually looking out for the well being of American taxpayers while the "man of the people," the Mad King, continues to smear her with his "Pocahontas" taunts, as he did yet again during the word salad with Russian dressing that he served up in Montana just the other evening. Elizabeth Warren's DNA is truly a non-issue in the larger scheme of things; there's no evidence that she ever exploited her possible Indian heritage in any substantial way, and even a DNA test would most likely be inconclusive. Not that this will make any difference at all to the mindlessly cheering redcaps who attend Trump's all-too-frequent pep rallies/worship services.

Nina Olson, the IRS' national taxpayer advocate, said that the private contractors have targeted lower-income taxpayers into getting locked into repayment plans that they won't be able to maintain. As a consequence, the most financially vulnerable taxpayers are unable to pay for things they need; they can't meet their basic living expenses.

If Trump truly wanted to do something good for the average American taxpayer, he would have pushed for true tax reform that included substantially smaller tax cuts for the wealthy than
that train wreck he pushed and signed off on last year, substantially larger tax cuts for the rest of us, and while he was at it, one-time amnesty for the millions of middle-class and marginally middle-class who are currently struggling to pay their delinquent taxes. But don't look for any of that any time soon. Instead I think we can expect more of the same from the Scammer In Chief. It may be only a matter of time before we see the revival of actual debtors' prisons -- private ones, ones, of course.

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