The Internal Revenue Service has decided to renew the contracts of two companies involved in its controversial private debt collection program.
The two firms - Pioneer Credit Recovery and CBE Group - began doing collection work for the IRS in 2006, according to FederalTimes.com. The private collection program has received criticism from privacy advocates, federal employee unions and National Taxpayer Advocate Nina Olson.
She pointed out in a recent report that the program is falling far short of revenue projections and that the costs of the program have far exceeded the revenue generated. The IRS had estimated that the private debt collectors would haul in $65 million last year. Instead, the private collectors only brought in $31 million, of which two-thirds went to the IRS and the other third to them. Olson's office has called for the repeal of the program.
The House passed a bill last October that would repeal the IRS's ability to use private debt collection companies. It went to the Senate, where it has been referred to the Senate Finance Committee.
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