ANSWERING PRIVATE COLLECTION CRITICISM
The IRS faces limits in assigning delinquent taxpayer accounts to private debt collectors, the agency said in response to a federal audit that found a 1 percent collection rate for those cases. That low success rate can in part be explained by how old the cases are that get handed to the private companies — an average of about four years, according to TIGTA’s examination. To boost that, TIGTA recommended the IRS assign newer delinquent cases to the private debt collectors. But under the 2015 law establishing the private debt collection program, the IRS can only send them inactive accounts, which aren’t going to be worked by IRS employees or already have to no avail, the agency said. “Congress specifically defined the ‘inactive tax receivables’ that must be collected under qualified tax collection contracts in [Internal Revenue Code Section] 6306(c) as including older inventory,” it said.
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