The program to place unpaid debts owed to the Internal Revenue Service with one of four private collection agencies is on pace to more than double the amount collected during its first full-year in action, according to a report provided to the Senate Finance Committee yesterday.
Through the first three months of the 2019 fiscal year, which began on Oct. 1, 2018, the program has collected $41 million and netted the federal government more than $30 million after expenses. During the entire 2018 fiscal year, the program collected $82 million and netted $51 million in profit for the government.
“The IRS private debt collection program continues to prove its value,” said Sen. Chuck Grassley [R-Iowa], chairman of the Senate Finance Committee, in a statement. “The most recent data again shows that revenue returned to the U.S. Treasury exceeds all associated program costs. That’s something we don’t often see here in Washington. The pace of collections is also accelerating, showing the full potential of the program has yet to be achieved.”
All four agencies are roughly in the same ballpark, in terms of dollars collected, ranging from ConServe, which has collected $9.9 million, to CBE Group, which has collected $11.6 million. The four agencies have also entered into 27,000 payment arrangements totaling $174 million.
“To date, tens of thousands of taxpayers have now fully resolved their tax debts via the PDC Program, and more than 27,000 installment agreements are currently in process providing taxpayers the opportunity to pay their tax debt over time via flexible monthly payments tailored to their budget,” said Kristin Walter, a spokeswoman for the Partnership for Tax Compliance, a nonprofit coalition of the four agencies, in a statement. “Over the past two fiscal years, participating taxpayers consistently give the PDC program an A grade when surveyed by a third party vendor about their experience with the program.”
The private collection agency program has been blasted by consumer advocates and opponents of the program for targeting lower-income individuals and not providing strong enough resultsto justify its continued operation. A number of Democrats have proposed legislation to end the program.