On September 22, 2021, the Internal Revenue Service (IRS) issued a press release announcing it awarded new contracts to three private-sector collection agencies to collect overdue tax debts. The previous contracts with third-party debt collectors expired Wednesday, September 22, 2021, and the newly announced contracts began the following day, September 23, 2021.
In December 2015 Congress passed a law that allowed contractors to collect outstanding inactive tax receivables on the government’s behalf. On September 26, 2016, the IRS announced plans to begin private collection of certain overdue federal tax debts and selected four contractors to implement the new program. The four companies selected by the IRS in 2016 were CBE Group (Cedar Falls, Iowa), ConServe (Fairport, N.Y.), Performant (Livermore, Calif.), and Pioneer (Horseheads, N.Y.). As a condition of receiving a contract, the agencies selected must respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act..
The New Contracts
The following companies were awarded the new IRS collection contracts.
- CBE Group, Inc. (Waterloo, IA)
- Coast Professional, Inc. (Albion, NY)
- ConServe (Fairport, N.Y.)
While CBE Group and ConServe have been collecting IRS debts since 2016, Coast Professional, Inc is new to the mix.
The full press release can be found here.
This is the third-go around at such a program. in March 2019, insideARM reported that the contract awarded in 2016 appeared to be successful. Earlier attempts were in 1996 and 2006. Both programs were canceled amidst claims that they cost taxpayers more than they collected. However, these claims were disputed, even by the Government Accounting Office (GAO). See this 2010 article about problems with the decision to end the 2006 program. It's promising that the IRS has chosen to award new contracts and continue the program.