The program faces the same controversy as prior ones regarding whether tax collection should be reserved as an inherently governmental function. Image: supawat bursuk/Shutterstock.com
By: FEDweek StaffThe GAO has cited issues of fairness in the IRS program of private collection of certain tax debt, in the latest of a series of reports questioning such programs.
The current program began in 2017 following the cancellation of two prior similar efforts—that were also focused on relatively small debts that would be low priority for the IRS to attempt to collect itself—after criticisms about the tactics that private collectors used and because they yielded little in additional revenue, after the contractors took their share.
The current program, which started with four contractors and now has three, already has been revised to exclude certain taxpayers, including more than 1 million with limited financial means; it also falls under the same controversy as the prior ones regarding whether tax collection should be reserved to the IRS itself as an inherently governmental function.
A report said that the IRS and its parent Treasury Department “have established policies that call for IRS to evaluate enforcement equity, but IRS has not yet established measurable standards related to the PDC program, such as for comparing rates that different demographic groups are assigned to the program. Doing so would better position IRS to determine whether taxpayers with debt get equitable services, information, and opportunities to meet their tax obligations.”
The IRS also has not “defined standards it can use to evaluate disparities or fairness related to the PDC program or take action to address any relevant disparities,” it said.
The IRS agreed with recommendations including that it set standards for evaluating equity for taxpayers who are either assigned to or excluded from the program, assess it against those standards for equity and take actions to address any identified issues. The GAO also repeated recommendations still pending from a report on the program in 2019, related to assigning cases for collection sooner and excluding those that are the least likely to be collectible.
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