Bipartisan Support Strengthens and Expands the IRS Private Debt Collection Program
WASHINGTON, DC – June 14, 2019 – The Senate has passed the Taxpayer First Act, an IRS reform bill that includes dozens of provisions to improve IRS customer service, IT infrastructure and taxpayer rights. The bill includes several important changes to the IRS Private Debt Collection (PDC) Program, specifically, the legislation:
Creates two new categories of cases not eligible for future referral to private collection agencies: (1) taxpayers whose income is substantially derived from supplemental security income benefits or disability insurance benefit payments and (2) taxpayers with an adjusted gross income of 200 percent of the applicable poverty level and below. This provision ensures that low income taxpayers will stay at the IRS and not be referred into the PDC Program.
Changes the definition of inactive tax receivables that can be assigned to the PDC Program to those in which more than two years has passed since assessment of the tax debt and expands the duration of installment agreements between the taxpayer and PDC Program to seven years. This change will give the IRS flexibility in the PDC Program, which then provides taxpayers more time to pay down tax debts via manageable payment plans.
Clarifies that the IRS may use funds generated by the PDC Program for the Special Compliance Personnel Program Fund for various program costs, including hiring new IRS collections personnel, improvements to IRS software and technology, and reimbursement of the IRS or other government agencies for the cost of administering the qualified tax collection program. This change ensures that 100 percent of PDC Program costs and oversight are covered by the revenue collected by the program itself.
IRS reports to Congress consistently show that the PDC Program is working very well for both taxpayers and the U.S. Treasury. To date, the PDC Program has collected more than $130.6 million in past due tax revenue previously thought to be uncollectible and has provided $23.6 million to allow for the hiring and training of more than 100 new permanent IRS internal collections staff.
“We’re very happy to see such a strong bipartisan effort to strengthen and expand the PDC Program,” said Kristin Walter, spokesperson for the Partnership for Tax Compliance. “Taxpayers will continue to benefit from the Program’s ability to expand the IRS’s customer service capacity, reaching out to provide a broader array of flexible, installment agreement options, and the additional tax dollars collected via the PDC Program will go a long way to strengthen the budget and pay for critical federal efforts in the years ahead.”
To learn more about the IRS Private Debt Collection Program, visit www.parternshipfortaxcompliance.org