Efficacy and the Automated Collection System at the IRS
The Automated Collection System – what is it? Controlling IDRS (Integrated Data Retrieval System) non-filer and balance due cases that need contact via telephone is the ACS (Automated Collection System). Simply put, the ACS is a computerized network which contacts taxpayers who owe money to the IRS, which is a huge IRS issue.
ACS was developed in the 1980s to combat a big IRS problem of delinquent taxes and let IRS employees to communicate with taxpayers by phone and/or mail and to facilitate in the collection of taxes. In order to fix the tax debt, notices, liens, or levies are provided and specific cases are examined by tax examiners through this system. The system has essential information on audit information and taxpayer details.
By contacting creditors and collecting court records, corporate files, and bank statements, the ACS verifies every piece of information stored in it. Reviews for validity and consistency are built into the system.
The question remains if the ACS is an efficient way to collect taxes. A hearing to decide if private methods were better than the ACS was held by congress.
An IRS National Taxpayer Advocate, Nina Olsen argues that ACS is less expensive than privatization. The private program costs $12 million each year to utilize plus commissions of up to 24% with net revenues of just $11 million.
The ACS, on the other hand, can bring in revenues of $91.8 million to $145 million with only $7 million in investment and no commissions. This is more cost effective, compared to the $81 million that the government spends each year on the privatization of collections.
The IRS’s reason for outsourcing is because they can’t afford to employ more debt collection officers. They are, however, regaining control of a few cases from private collectors and handling them in-house to decide which method is more effective.
Colleen Kelley, the president of the National Treasury Employees Union (NTEU), testified at the hearing: “There has been no question from the outset that using private companies to collect taxes is far more costly than having trained, accountable IRS officers perform this work and poses a severe and unnecessary risk to taxpayers’ sensitive and personal information.”
Kelley also emphasizes the fact that IRS employees cost just 40 cents for each $100 debt collected, making them the most cost effective tax collectors in the US. She states that with this resource, there’s no need to outsource to private debt collection.
The ACS is a way for the government to recoup more of the revenue from unpaid taxes. When compared with the IRS employees’ cost efficient work, private debt collection is expensive.
Filed under Blog by on Oct 23rd, 2009. 