IRS PDC Program Continues to Succeed, Collected $130.6 million Through December 2018

A new quarterly report to Congress on the Internal Revenue Service’s (IRS) Private Debt Collection (PDC) Program shows continued success. Since the third iteration of the PDC Program was implemented, it brought in total revenue of over $130.6 million. Less the overall costs of the program, which were $77.6 million, the program’s latest net balance is $52.9 million. The report focuses on Fiscal Year 2019, which begins on October 1 for the federal government, through December 13, 2018.

The IRS has contracts with four collection agencies for this program: CBE, ConServe, Performant, and Pioneer. The number and balance amount of receivables placed among the four agencies seems to be a roughly even spread.

CBE takes the crown for most dollars collected with $11.59 million in total payments. This is $1.3 million more than the amounts collected by Pioneer, which came in second with $10.26 million. Performant collected $10 million and ConServe collected $9.9 million.

CBE also entered into the highest amount of installment agreements at 9,736, with ConServe coming in second at 7,390.

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insideARM Perspective

It seems that third time’s the charm for the PDC Program. Previously, the IRS attempted to implement PDC programs on two other occasions. According to the report, both times the programs resulted in a financial net loss to the government: the 1996 pilot program resulted in a $17 million net loss and was canceled after 12 months, while the 2006 initiative resulted in a $20.9 million net loss. However, not all agreed with the justification for these cancelations. For instance, in 2010 a Government Accountability Office (GAO) report said that the IRS may have used flawed study methodology when it decided to stop outsourcing some delinquent tax collection work to private debt collection agencies.

The last quarterly report of the current program showed a positive net balance, and it seems that the trend continues. This is despite the IRS’s management of the program, which is less than stellar according to the Treasury Inspector General for Tax Administration report issued about a month prior to the last quarterly report.