IRS Awards New Contracts to Private Collection Agencies

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.

Background

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..

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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.

 insideARM Perspective:

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.