Update: The Road Back to the IRS Private Debt Collection Program

Last month I wrote about IRS Commissioner John Koskinen’s testimony to the Senate Committee on Finance. Among many topics addressed in this hearing was the recently passed FAST Act provision to reinstate the use of private debt collectors within the IRS.

At the February 10 hearing the Commissioner said, “We’re going to do everything we can to get the program up and running as quickly as we can. We [are planning] a bidders conference this month. Within the 90 days we are committed to providing a timeline as to when the program would actually be up and running and implemented. The bidders conference is to get us started. Our goal – if we can pull it off – is to learn from mistakes and give it the best chance to succeed. As it stands now in the normal procurement process plus developing the program we expect to have contracts with those acceptable collectors before the end of this fiscal year.”

Evidently, IRS Commissioner John Koskinen told Sen. Chuck Grassley (R-Iowa) in a letter last Friday that the agency is currently planning to get quotes from private collection agencies in July, and would then be handing over actual cases to the winning companies by April 2017. The December highway bill, which brought back the private debt collection program, gave the IRS until early March of this year to start entering into contracts with companies. Koskinen also told Tax Notes that all sides are trying to figure out the best way to start a program when taxpayers are increasingly worried about identity theft. “If everyone hangs up the minute you say, ‘We’re from the IRS,’ it’s not going to help on the private debt collection,” Koskinen said.

According to an article in Politico earlier this week, Sen. Chuck Grassley (R-Iowa) said to Morning Tax in a statement that he was skeptical about why it would take a year to get the renewed private tax debt collection program running.