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Economic News, Data and Analysis

Collectors Cost IRS More Than They Raise

I’ve said this before… the use of private debt collectors is a bad idea…

Collectors Cost IRS More Than They Raise – washingtonpost.com

The Internal Revenue Service expects to lose more than $37 million by using private debt collectors to pursue tax scofflaws through a program that has outraged consumers and led to charges on Capitol Hill that the agency is wasting money for work that IRS agents could do more effectively.
Since 2006, the agency has used three companies to go after a $1 billion slice of the nation’s unpaid taxes. Despite aggressive collection tactics, the companies have rounded up only $49 million, little more than half of what it has cost the IRS to implement the program. The debt collectors have pocketed commissions of up to 24 percent.

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