A federal judge has filed paperwork alerting the Internal Revenue Service that he plans to halt their experiment in outsourcing debt collection, siding with a Texas company that claimed they had been unfairly excluded from the bidding process.

Last fall, the IRS received approval to outsource debt collection to private companies, but limited the bidders for the first phase of the project to companies that already had contracts with the federal government to perform the services. Houston's Universal Fidelity filed suit in the U.S. Court of Federal Claims earlier this year.

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