The recently published IRS 2019 Fiscal Year Annual Report includes program performance for the Internal Revenue Service’s Private Debt Collection Program. The experts at Optima Tax Relief reviews the findings and share what it means for American taxpayers.
What is the Private Debt Collection Program?
Since 2017, the IRS has been contracting a small number of private collection agencies to manage the tax debt for some select business tax accounts as a result of a requirement issued by Congress. Through the IRS Private Debt Collection Program, the IRS works with these private collection agencies to work with taxpayers who have overdue tax bills. These agencies help taxpayers settle their tax debts.
Last year, the program was enhanced to include a new payment method that provided taxpayers an additional and convenient option to preauthorize direct debits (for either a single payment or a series of scheduled payments) against their federal tax debt. Additionally, this new payment method was designed to mitigate potential fraud (which increased by sixty percent in 2018 alone).
In June 2019, the IRS began assigning inactive business accounts to the private collection agencies through the Private Debt Collection Program, expanding the number of taxpayers being serviced by the program.
Currently, the four PCAs that have been contracted by the IRS include CBE, Performant, Pioneer and ConServe. These agencies have been fully vetted and contracted by the U.S. Department of Treasury.
Private Debt Collection Program Performance
Over the course of the fiscal year 2019, the IRS is reporting an increase in collection activity generated through the Private Debt Collection Program, and the program has achieved the following milestones:
- Since program inception, the contracted private collection agencies (also known as PCAs) have serviced 200,000 taxpayers by either establishing a new payment arrangement or facilitating payment in full on their outstanding debt.
- More than 2.4 million cases have been assigned to one of the four private collection agencies by the IRS – representing more than $22.5 billion in outstanding payment balances.
- The Private Debt Collection program generated $301.7 million in revenue.
The revenue generated through the Private Debt Collection Program continues to exceed the program’s operational costs, and a percentage of this revenue has been invested to hire an additional one hundred Special Compliance Personnel employees to support the IRS’s Automated Collection System.
Click here to read the full 2019 Annual Report and IRS 2018-2022 Strategic Plan.