RDS/Alatax Responds to insideARM.com Story

Editor’s Note: InsideARM.com published a story on July 18 regarding RDS/Alatax and its role in distributing sales tax revenues to three local government offices in Alabama. Birmingham-based RDS/Alatax is a division of Portfolio Recovery Associates that provides revenue-enhancement support services to state and local governments. RDS/Alatax sent the following letter to the editor in response to the story – Ed.

RDS/Alatax appreciates the opportunity to clarify the story titled “Collection Agency Making Good on $2.4 million Error” that ran on insideARM.com on July 18, 2007.

In 2003, Elmore County in Alabama instituted a new one-cent sales tax collected in a special tax district in Prattville, Ala., with half of the proceeds to be directed to the Elmore County Board of Education, a quarter of the revenue to go to Elmore County and the remaining fourth to the City of Prattville. Elmore County then contracted with RDS to collect and administer this tax on its behalf.

While we were aware of the multiple beneficiaries involved, as part of our agreement with Elmore County, RDS/Alatax was instructed to collect and distribute 100 percent of the funds to Elmore County.

For four years, the one-cent sales tax was collected and distributed according to instructions given to RDS/Alatax from our client, Elmore County. In that time, neither the Board of Education, the State Examiner of Public Accounts nor Elmore County recognized that the share of funds designated for the Board of Education was not received by them. Multiple audits occurred during this period, and the issue was detected in the last audit in March 2007.

We have reviewed this situation with Elmore County, and they agree that we were fulfilling the terms of our contract. We do not have a contractual relationship with the City of Prattville, and it is our understanding that they are addressing the issue separately.

We value our relationship with Elmore County, who has been an RDS/Alatax client for 12 years. We are committed to working through this issue and assisting our client, Elmore County, in resolving this matter.

Based on this information, we hope that insideARM.com will understand that RDS/Alatax believes the original headline is misleading. We appreciate the opportunity to set the facts straight and look forward to your response in this matter.

Sincerely,
 

RDS/Alatax