The IRS Private Debt Collection Program Has Not Effectively Reported All Program Costs or Included Adequate Disclosures

The Chief Financial Officer (CFO) should address the growing balance of $25.8 million in the Cost of Services Fund, disclose in its Annual Reports to Congress the net revenue sent from the Private Debt Collection (PDC) program to the General Fund, and determine the amount necessary to retain to pay the Private Collection Agencies (PCAs) without causing further growth in the Cost of Services Fund.

The Director, Collection, Small Business/Self Employed (SB/SE) Division, should disclose Private Debt Collection (PDC) startup costs related to the PDC program and the Special Compliance Personnel Fund.

The Director, Collection, Small Business/Self-Employed (SB/SE) Division, should in the next Private Debt Collection (PDC) and Special Compliance Personnel Program Annual Reports to Congress disclose which costs were reimbursed from the Special Compliance Personnel Program Fund since its inception or paid from discretionary funds

The Director, Collection, Small Business/Self-Employed (SB/SE) Division, should develop a review process that includes comparing the Integrated Financial System (IFS) expense report for Private Debt Collection (PDC) contracts with the PDC program’s reported contract costs to identify unreported contract costs.

The Director, Collection, Small Business/Self-Employed Division, should update the Private Debt Collection (PDC) program guidance document to clarify how employees’ time should be charged to reflect work performed in support of the PDC program.