Debt collectors working for the Internal Revenue Service recouped nearly $213 million in owed taxes this year, the largest recovery since the program’s restart several years ago, according to recently released numbers, MarketWatch.com reported. The fiscal year 2019 results are more than double the $82 million in revenue raked in a year before and well beyond the $6.5 million collected in fiscal year 2017. After commissions and costs, the IRS program has a balance of over $170 million. Two previous versions of the debt collection program — where the IRS contracts with private debt collectors — ended because the programs ultimately lost money when costs outstripped collection rates. A 1996 program ended with a $17 million net loss and a 2006 program ended with an almost $21 million net loss. Lawmakers revived the collection program by including provisions for it inside a 2015 highway funding bill. The $213 million in revenue may by the largest sum yet for the private debt collection program, but it’s still a sliver of the tax money that goes unpaid every year. The gross average tax gap every year is $441 billion, according to IRS figures. That’s before the agency’s enforcement efforts, which narrows the gap to $381 billion. The IRS could bring in $535 billion over a decade if it focused on high net worth taxpayers, a recent study from former Treasury Secretary Lawrence Summers suggested.
