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Private Agencies Collect 1.79% on Overdue Tax Accounts

 Private collection agencies have collected $498.4 million in commissionable payments from the $30.1 billion in accounts assigned to them. That rate of 1.79 percent collected may stem from the fact the average age of the accounts.

 Those were among the statistics provided in Fiscal Year 2021 Biannual Independent Assessment of Private Collection Agency Performance, issued on December 28.

The Treasury Inspector General for Tax Administration recommended the Internal Revenue Service try to identify cases it will not work earlier.  The report states the average age of PCA accounts increased to 5.31 years from the 4.75 years reported in the earlier review. However, the IRS disagreed with the recommendation for reasons that the report did not state. However, the report also said 55 percent of agreements between taxpayers involved and the agencies were canceled when taxpayers defaulted.

Nevertheless, the collections have enabled the IRS to add collection staff as the IRS can legally keep up to 25 percent of the amount collected by the PCAs. These staffers were added under the Special Compliance Personnel Program Accounts and as of September 10, there were of these staffers employed at two IRS campuses. As of May 14, SCP employees had collected almost $218 million.

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