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TIGTA Report Finds IRS Private Debt Collection Policies May Be Harmful to Taxpayers

The Treasury Inspector General of Tax Administration (TIGTA) recently conducted an audit of the Internal Revenue Service (IRS)'s latest private debt collection program and found much room for improvement. As of May 31, 2018, the private debt collection program had netted $1.3 million, but the private agencies have collected only 1 percent of the $4.1 billion assigned to the program. For reference, the industry average for 2016 was 9.9 percent.

TIGTA identified a number of IRS policies for its private debt collection program that are cause for concern. For example, the complaint process relies on self-reporting by the collection agencies, and there is no referral unit to ensure the appropriateness of cases being sent to the collection agencies. Some 54 percent of taxpayer accounts assigned to private collection agencies had low-income indicators, but were nevertheless assigned to collections.

Unfortunately, IRS management and TIGTA are unable to agree on the method to correct these issues. For further information, click here.

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