Collection Agencies Article Author: ACA International
The American Jobs Creation Act of 2004 authorized the Internal Revenue Service (IRS) to contract with private collection agencies (PCAs) to collect against an estimated $250 billion in delinquent taxes.
PCAs working with the U.S. Department of Treasury Financial Management Services Division (FMS) collected $610 million in fiscal year 2004, an increase of 12 percent over collections of fiscal year 2003. (Source: Fiscal Year 2004 Report to the Congress – U.S. Government Receivables and Debt Collection Activities of Federal Agencies.)
In 2004, PCAs under contract with the Department of Education, the Department of Health and Human Services and the Treasury had referrals of $18.3 billion in delinquent federal debt. (Source: Fiscal Year 2004 Report to the Congress – U.S. Government Receivables and Debt Collection Activities of Federal Agencies.)
In addition to the amount they recovered, PCAs rehabilitated $587 million in delinquent loans for the Department of Education in FY 2004. Student loan statutes allow borrowers to rehabilitate if they make 12 consecutive on–time monthly payments, which is the preferred method for borrowers to cure defaults, other than paying the debt in full. (Source: Fiscal Year 2004 Report to the Congress – U.S. Government Receivables and Debt Collection Activities of Federal Agencies.)
Regarding PCAs, the Department of Education tracks collection costs as a percentage of collections. These costs have shown a declining trend from 18.6 percent in FY 1999 to 16 percent in FY 2004. This decline is the direct result of reduced negotiated rates in the PCA contracts and increased usage of lower cost PCA recovery tools such as rehabilitation and consolidation. (Source: Fiscal Year 2004 Report to the Congress – U.S. Government Receivables and Debt Collection Activities of Federal Agencies.)
About 40 state revenue departments and the District of Columbia have used PCAs for the collection of delinquent taxes. (Source: U.S. General Accounting Office, Tax Debt Collection, GAO–04–492, May 2004, p. 7.)
If you would like to add this article to your website, you must add the follwing code to be in compliance:
Collection Agencies Article courtesy of http://www.acainternational.org | Here is the code you can just copy and paste:
<a href="http://www.advinfoc.com/articles/Collection_Agencies/page_1/">Collection Agencies Article</a> courtesy of <a href="http://www.acainternational.org" >http://www.acainternational.org</a> |
| 
