IRS Private Debt Collection Program Grows Revenue by 70% through Q3 of FY19
Revenue collected by the Program has nearly exceeded a quarter of a billion dollars and continues to grow.
Washington, D.C. (July 19, 2019) – Today, the Senate Finance Committee released the latest quarterly report detailing the progress of the Internal Revenue Service (IRS) Private Debt Collection (PDC) Program – which works to strengthen the U.S. Treasury and the effectiveness of the IRS by providing taxpayers with customized repayment solutions to help them satisfy lingering tax debt in a manageable way.
The IRS reports that as of June 13, 2019, the PDC Program has directly collected $228.7 million in voluntary payments of long past-due tax revenue, plus millions more that has been collected by the IRS as a result of PDC Program taxpayer outreach. Tax revenue collected by the PDC Program through the third quarter of FY19 has exceeded IRS forecasts for the fiscal year ($140 million collected vs. $114.4 million projected), which puts the Program on pace to double the amount of revenue collected the prior year.
In addition to collecting revenue for the US. Treasury, the PDC Program was also designed to help the IRS reverse years of underfunding by contributing 25 percent of the tax revenue collected to the Special Compliance Personnel Program (SCPP) Fund, which provides resources to allow the IRS to hire and train new internal collections staff. In the report released today, the IRS shares that the PDC Program has contributed $46 million to the SCPP Fund and per the recent SCPP Fund Report to Congress, the IRS has already hired and trained 100 new employees to work automated collection system cases in their Philadelphia Service Center, with an additional 100 new IRS hires planned for FY20.
“In just two years since implementation, the PDC Program is paying for itself, demonstrating its value to the U.S. Treasury and allowing the IRS to double the staffing of their new SCPP Program,” said Kristin Walter, spokesperson for the Partnership for Tax Compliance. “The successful public-private partnership is also working well for American taxpayers who can now choose to participate in a flexible, collaborative path to resolve their tax debts over time. Participating taxpayers consistently give the PDC program an A grade when surveyed by a third party vendor about their experience with the program.”
Private Sector Best Practices Boost Federal Collections
The PDC Program was mandated by Congress in 2015, as part of bipartisan legislation, and officially launched in April 2017. The effort seeks to expand the customer service capacity of the IRS to offer a segment of taxpayers – those with uncontested tax underpayments – a variety of voluntary payment plans tailored to fit their particular budgets to help them pay down their tax obligations over time.
There are currently millions of inactive underpayment accounts in arrears representing approximately $131 billion in federal tax revenue. Each year, $20 to 30 billion of that tax revenue is lost as a portion of accounts age out due to the collection statute of limitations. As previously uncollectable tax revenue is brought in by PDC program payment plans, federal solvency improves and the IRS can augment their collection and recovery capabilities by adding more internal staff.
While the PDC program was implemented slowly over the course of the first year to ensure adherence to IRS rules and procedures, the agency has now expanded the effort, as required by Congress. As current installment plans continue to be paid over time, new installment agreements begin and a greater numbers of accounts are released into the program for outreach, the revenue generated by the PDC Program to bolster the Treasury will grow.
“With concerns about the deficit rising each day, Members of Congress are actively searching for revenue to fund new and ongoing federal initiatives. 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,” said Walter.
About the Partnership for Tax Compliance
The Partnership for Tax Compliance is a 501(c)6 non-profit organization that works to educate policymakers and taxpayers about the importance of the public/private partnerships that advance fair tax participation and bolster state and federal government treasuries by recovering tax underpayments. This new coalition aggregates and leverages the vast expertise of the private recovery companies that support the IRS PDC Program, including CBE Group, Performant Recovery, ConServe and Pioneer Credit Recovery. For more information, visit www.partnershipfortaxcompliance.org