IRS paid private debt collectors $20 million to recoup $6.7 million from low-income Americans

The Internal Revenue Service (IRS) spent millions of dollars over the past financial year to contract private debt collectors that targeted some of Americas poorest citizens for unpaid taxes and only recovered a small fraction of the funds they were supposed to return to the agency, a new report released on Wednesday found. The report, by the independent Taxpayer Advocate Service, found that the debt collectors had cost the IRS $20 million but had only brought in $6.7 million — less than one percent of the total amount targeted for collection. The report concluded that the use of private debt collectors was one of the agency’s “most serious problems.” “The program as implemented has not generated net revenues and results in the IRS improperly paying commissions to [private collection agencies] for work the did not perform,” the report read.