In 2015 Congress passed a law in 2015 requiring the I.R.S. to use outside contractors to make a dent in the $138 billion that taxpayers owe the government. Well, it didn't work out too well last year. The IRS paid the private debt collectors $20 million. The return on this investment: the private collectors brought in only $6.7 million in back taxes, or less than 1 percent of the amount assigned for collection.
To further aggravate you, the private contractors in some cases were paid 25 percent commissions on collections that the I.R.S. made without their help. Also, 45 percent of the collections by private contractors were from taxpayers whose incomes fell below the minimum threshold, including those who received Social Security disability payments.
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