Pioneer Credit Recovery, Inc. (PCR) is a company contracted by the State of New Jersey Division of Taxation (Division) through the public bidding process to assist in the collection of deficient (underpaid) and delinquent (unfiled) State taxes, as permitted under Chapter 172, P.L. 1992. PCR is Taxation’s authorized collection agency and is overseen by the Division’s Compliance Branch.
PCR, and their employees who work on this contract, are bound by the same confidentiality rules in the State Tax Uniform Procedure Law (N.J.S.A. 54:50-8 and N.J.S.A. 54:50-9); the Internal Revenue Code (U.S.C. 6103, 7213), and the State ethics guidelines and procedures required of all other Taxation employees. Violators of these laws are subject to prosecution.
If you’re contacted by PCR, please respond directly to that caseworker in order to expedite your case.
The PCR Collection Process
After you file a tax return, if you don’t pay the balance in full, the Division sends a billing notice for the amount due. This amount includes any penalties and interest. If you fail to make payment within 30 days of the billing notice, your account/tax liability will be forwarded to PCR for debt collection.
If you fail to file a tax return, your account is considered to be delinquent and your tax liability will be arbitrarily assessed. If you fall into this category, it is imperative that you file all missing returns. This will ensure that the Division’s records reflect your true liability.
Here’s How the PCR Collection Process Works:
- PCR will review the debt and assign the account to a caseworker.
- The caseworker then mails an initial contact letter along with an updated Schedule of Liabilities detailing the current balance due.
- PCR will attempt to contact the taxpayer (or their authorized representative) in an effort to resolve the matter.
- If the debt remains unresolved after 30 days, PCR will issue a “Notice of Demand for Payment” via certified mail. This official notification allows taxpayers either 30 days (for deficient items) or 90 days (for delinquent items) to resolve the issue. It is important that taxpayers with delinquent returns be aware that penalty and fees are assessed on delinquencies that are higher than if a return was filed timely.
- If the debt is still outstanding, a Certificate of Debt (COD) is entered with the Clerk of the New Jersey Superior Court. A COD has the same force and effect as a Docketed Judgment adjudicated in any court of law. If a COD is issued for the outstanding liability, a Cost of Collection Fee is added to the docketed judgment and becomes part of the outstanding liability.
- Once the COD is in place, the case is returned to the Division for further collection action.
- All cases with COD’s are assessed a Cost of Collection which is in addition to the Recovery Fee.
Referral Cost Recovery Fee
Beginning in October 2003, the Division began imposing a Referral Cost Recovery Fee as authorized by N.J.S.A. 54:49-12.3 and N.J.A.C. 18:2-2.5(d).
Effective July 1, 2016, the Referral Cost Recovery Fee rate is 10.7%
In cases where any State tax remains unpaid and your account is referred to PCR for collection, a Referral Cost Recovery Fee of 10.7% of the amount referred will be assessed and added to the tax liability. This fee will be in addition to any interest or penalties imposed. If your returns haven’t been filed (account is delinquent), and your tax liability has been arbitrarily assessed, the Referral Cost Recovery Fee will remain 10.7% of this amount.
Once you file your delinquent returns, you may receive an updated billing notice from the Division if you still have a tax liability. The Referral Cost Recovery Fee will not be reflected on the billing notice sent to you, but will be shown as a separate item on the Schedule of Liabilities sent to you from PCR. Any revised billing notice sent to you from the Division does not lengthen the time that payment should be made to PCR before additional collection action is pursued.
The Referral Cost Recovery Fee is not compensation paid to PCR. This Fee is assessed to cover the expense incurred by the Division when taxes are not filed and paid in a timely manner or not resolved upon the issuance of an initial bill. Generally, each payment sent to Pioneer will have 10.7% of that payment applied to the Referral Cost Recovery Fee items until all Referral Cost Recovery Fee items are satisfied.
Cost of Collection
If any State tax isn’t paid within the time prescribed by law, and the Director issues a Certificate of Debt pursuant to R.S.54:49-12, a fee for the cost of collection of the tax may be imposed by the Director. The fees imposed pursuant to the statute are in addition to any interest or penalty, or both, otherwise allowed by law.
For additional information about the collection process.