The Internal Revenue Service has been given the go-ahead to continue a new private debt collection program with the trio of companies it originally awarded contracts to in March.

The Government Accountability Office denied bid protests filed by two unsuccessful contract bidders in late March this week.

The IRS had hoped that the three companies would be given cases to start collecting on as early as this month. That timetable will likely be pushed back a few months, to sometime in the early fall, the agency said.

The IRS had awarded the first phase of what are expected to be extremely lucrative contracts to the CBE Group Inc., of Waterloo, Iowa; Linebarger Goggan Blair & Sampson LLP, of Austin, Texas; and Pioneer Credit Recovery Inc., of Arcade, N.Y. While stop work orders had been issued to the private companies, the IRS has continued with its own preparations to implement the program.

The rejected bid protest called into question past accusations brought against law firm Linebarger Goggan Blair & Sampson.

Under the plan, the IRS will utilize private debt collectors for the first time, in an attempt to collect an estimated $1.4 billion in tax debts over the next decade. Participating firms will be allowed to keep up to 24 percent of whatever amounts they collect.

Previously on WebCPA:

Details Emerge Over IRS Contract Winner (May 5, 2006)

Private Debt Collection Could Be Halted (March 24, 2006)

IRS Selects Firms for Collection Effort (March 10, 2006)Judge to Tell IRS to Reopen Debt Collection Bids (Aug. 3, 2005)

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