GAO Issues Report on Private Debt Collection

by Patrick Lunsford CollectionIndustry.com

The Government Accountability Office released a report on the IRS’s plan to outsource back tax collection to private firms. The report said that the tax agency needs to put a better system in place to monitor and evaluate the program.

The purpose of the report, generically entitled “TAX DEBT COLLECTION: IRS Needs to Complete Steps to Help Ensure Contracting Out Achieves Desired Results and Best Use of Federal Resources,” was to determine whether the IRS had fully addressed certain issues in the limited implementation of the program in September. Also, the GAO wanted to be sure the IRS would take some of the lessons learned in the initial limited collection contracts – awarded to three private firms – and applying them to the initiative in broad release.

The IRS plans on expanding the private collection program late next year, with contract solicitations going out in March 2007. The IRS will be looking for as many as 12 collection agencies to collect back taxes at that time. It is anticipated that the full program will be running by early 2008.

The GAO reported said that while the IRS has made major progress in addressing 5 critical success factors and 17 subfactors, they have not completed work for three subfactors — setting results-oriented goals and measures, determining all private debt collection program costs, and evaluating the program based on the results-oriented goals and measures, once they are established.

The report recommended that the IRS establish for the program:

• results-oriented goals and measures;
• reliable, verifiable costs,
• evaluation plans, and
• criteria and processes for assessing the program before deciding whether to expand it.

The GAO also recommended that IRS ensure that its study reports all costs and the best use of those federal funds.

The entire GAO report can be found here.