IRS Defends its Hiring of Debt-Collection Firms

IRS Commissioner Mark Everson testified in defense of his agency’s private debt collection program again yesterday before a House Ways and Means oversight subcommittee.

Everson said that the number of complaints logged against the private collectors have been limited so far.  He said that out of 30,000 cases handled by collection agencies, there have been about 60 complaints, half of which came in the programs first month.

In a statement prepared before the hearing, Everson also specifically stressed the importance of continuing the program and noted the differences in private collection and IRS employee collection efforts.

“One issue that has been debated is the relative efficiency of using private collection agents PCAs versus IRS employees to collect the taxes owed.  The most important question is not whether IRS employees or PCAs can do the job more efficiently, but rather whether PCAs collect money that would otherwise go uncollected.  The IRS lacks the resources to pursue the relatively simple, geographically dispersed cases that are now being assigned to PCAs…if Congress provided the IRS additional enforcement resources, I believe those resources would be applied best by allocating them to more complex, higher priority cases that are not appropriate for PCAs.”