June 17, 1996
IRS Awards Contracts for
Delinquent Debt Collection
WASHINGTON - The Internal Revenue Service today awarded contracts to five vendors to test the feasibility of using private firms to assist the IRS in collecting delinquent federal taxes from individuals and businesses.
The IRS's budget appropriation for 1996 (Public Law 104-52) requires that
"$13,000,000 shall be used to initiate a program to utilize private counsel law firms
and debt collection agencies in the collection activities of the Internal Revenue
Service." The IRS received formal contract proposals from 33 vendors.
The five contracts were awarded to:
- Aman Collection Service, Inc., Aberdeen, SD
- Continental Credit Service, Kirkland, WA
- CSC Credit Services, Houston, TX
- GC Services, Washington, DC
- Unger & Associates, Dallas, TX
Under the terms of the contracts, the IRS will provide the private contractors with
limited case information on individuals and business taxpayers with outstanding tax
liabilities. The contractors will attempt to locate and contact both individual and
business taxpayers to remind them of their outstanding tax liabilities. They will also
inform them about the alternatives available to resolve the tax liabilities, such as
installment agreements and extensions of time to pay. Cases will include situations in
which employers have failed to deposit trust fund taxes (social security and income taxes
withheld from employee paychecks).
The cases the IRS provides to contractors will be those where the IRS has been unable
to locate or contact taxpayers, as well as those where the IRS has been unable to secure
payment through written notices and phone calls.
The contractors will work on cases of delinquent individual and business taxpayers
currently or formerly located in Alaska, Arizona, California, Colorado, Hawaii, Idaho,
Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming.
Under the terms of the contracts, contractors will be limited to locating delinquent
taxpayers, reminding them of their tax liabilities, securing promises to pay the IRS or
commitments to enter into IRS installment agreements, monitoring payments against promises
and commitments, and following up with taxpayers. Contractors may use telephone, mail and
other methods of contact, but they are strictly prohibited from initiating direct,
in-person contacts. All payments resulting from contractors' efforts will be made directly
to the IRS, not to the contractors. The contract provisions ensure that the privacy and
rights of taxpayers are protected, and contractors must comply with all federal laws
relating to collecting tax liabilities, including the Internal Revenue Code of 1986
(specifically including the disclosure provisions of the Code that prohibit improper
disclosure of taxpayer information), the Privacy Act of 1974, the Fair Debt Collections
Practices Act and the Taxpayer Bill of Rights.
Contractors will be paid a fixed price for each successful contact the IRS accepts. In
addition, contractors will also be paid performance fees based on the results of the
contact -- full payment within 30 days; extensions of time to pay; installment agreements
completed by the contractor; or installment agreements completed by the IRS. The IRS
emphasized that contractors will not be paid based on a percentage of what is collected.
Previous | Next
1996 IRS News Releases | News Releases Main | Home