IRS Should Study the Use of Private Tax Collectors, GAO Says

The IRS should consider the use of private collection agencies to reduce the $120 billion backlog of unpaid taxes, the General Accounting Office said in a report.

IRS has put off debt collections in recent years because it lacked the staff to do the work. ?The growth in the backlog of unpaid taxes poses a risk to our voluntary tax system,? said Michael Brostek, director of GAO Tax Issues.

The investigative agency did not analyze whether contracting out to private collection agencies was the best option. ?Doing nothing more than has been done recently is not preferable,? the report said. ?When the majority of taxpayers receiving phone calls from IRS are those who respond to written IRS notices, taxpayers and practitioners may conclude that failing to respond to IRS is an effective tactic for avoiding tax responsibilities,? the report said.

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