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26 Ways to Make Tax Season a Debt Resolution Season

  • Written by Joshua Fluegel

Many consumers are seeing a sudden inflow of money due to tax refunds this time of year. This provides plenty of opportunity for collection professionals to help empower consumers to take control of their financial situation and use their refund to remedy their debt problems once and for all. Collection Advisor worked with Afni’s training team and Jeffrey S. Simendinger, cofounder and chief operating officer of SIMM Associates to develop key tips, questions and a tax refund schedule to help your tax season collection efforts.

12 Tax Season Income Question Tips

How much will a consumer’s refund be? Here are some great questions collection professionals can use to ascertain the consumer’s ability to pay and help a consumer get the maximum return. Note question tips that are followed by the tax credit applicable to each situation or an appropriate question.

1. Did you worked in 2018? (earned income credit)
2. When do you file your taxes?
3. How many children are you filing for? (child tax credit) (daycare credit) (adoption credit)
4. Did you go to college in 2018? (college tax credit)
5. Are you a homeowner? (Mortgage interest credit)
6. Are you retired or on disability? (65 or older receives a tax credit) (credit ranges between $3,750-$7,500)
7. On average how much do you expect your return to be?
8. Who are you filing your taxes with?
9. Down payment? (How much can you put down today?)
10. A small payment? (“We can do $50.00 payments until you get your tax return.”)
11. Ask for postdated checks. (“I can postdate the remainder balance for February/ March.”)
12. Who in your family is getting a tax return? (Mom, Dad, spouse, sibling)

6 Terrific Tax Time Talk-Offs

Six talk-off suggestions for collection professionals will help consumers realize what a lifesaver a tax refund can be for their financial situation.

1. “Using your tax refund to take care of this debt will save you from having to use money out of your current budget. Just think of it as extra money. You won’t really miss it.”
2. “You may never have a better opportunity to get this debt resolved than you have right now using your tax refund.”
3. “You could really help yourself by using your tax refund to get this debt taken care of.”
4. “Using your tax refund to pay off this debt will help you to start the new year with a clean slate.”
5. “Many tax preparers advance the refund to you. You can get an advance on your expected tax refund and pay off this debt once and for all.”
6. “This is the time of year everyone waits for to pay off bills. Let’s not lose this opportunity to finally get this resolved.”

6 More Helpful Hints

Here are some additional tax season hints that collection professionals should always consider when working with consumers.

1. Push for down payments with a payment plan based on a final payment next month when the consumer gets his/her tax refund.
2. Suggest potential money sources.
3. Find out when the consumer gets his/her bonus from work. Set up a down payment and post date the rest for then.
4. Be creative and think outside the box. Make closing the account a team effort with the consumer.
5. Always push for a down payment.
6. Always sell benefits of paying the account off.

2 Frequently Asked Questions

Different situations with consumers can bring about some interesting questions from professionals on the collection floor. Here are some responses to frequently asked questions.

1. What if the consumer tells me they haven’t filed because of not receiving their W-2 Form? Employers are required to mail W-2 Forms by January 31. The consumer should first contact their place of employment and check the address where the company sent their W-2 Form. Consumers may also have access to their W-2 form online with their employer. Consumers can also call the IRS at 1-800- 829-1040 to get a copy of their W-2 Form.
2. Should I always bring up the “tax refund” conversation to the consumer? Yes. Always assume the consumer is filing taxes and getting a rapid refund. So ask, “When will you be getting your tax refund back?” rather than asking, “Are you getting a tax refund?”

Letter Campaigns

Another way to help consumers resolve their debt during tax season is with a strategic letter campaign. “Tax season settlement letter campaigns are another must to take advantage of any extra money a consumer may have at their disposal,” said Simendinger. “Those letters can be sent via regular mail or by email depending on client covenants and the agency’s available technology. This strategy is something that we’ve done every year during our entire 27-year history.”

Tax Return Schedule

Awareness of when tax return payments are made based on the date the return was submitted can be a great asset to collection professionals. It can help with negotiation and the scheduling of payments. Listed online is an estimation of refund payment dates based on the date the tax return was accepted by the IRS. The schedule has been created based on previous tax refund schedules released by the IRS.

- Click here for the tax return schedule (Collection Advisor Professional Network Members Only) -