In the American Jobs Creation  Act of 2004, Congress authorized IRS to contract with private sector debt  collection companies to collect federal tax debts. On November 27,  2006, the consulting company began administering the survey. PCA Program Data, Survey Data, and Key Related Findings

According to the PCAs, 37,030 tax debt cases were referred by IRS from  September 2006 through February 2007. PCAs reported a total  number of 13,630 right party contacts from September 2006 through  February 2007, with 6,793 of these contacts made after the survey was  available. Because PCAs began calling taxpayers in September 2006  before the survey was available, about 50 percent of all right party  contacts identified during the period of our review were not eligible to  take the survey. According to the consulting company, the validity of the survey was based  on the key underlying assumption that all right party contacts would be  offered a chance to take the survey. Although IRS instructed the PCAs to  offer the survey to all right party contacts, we could not obtain  information on how many of the 6,793 contacts were offered the survey. One PCA reported that it offered the survey to 999 right party contacts and  made 2,694 right party contacts during this period. Beginning in early April 2007, IRS officials reemphasized the need for  PCAs to offer the survey to all right party contacts and to keep records in  this regard. The consulting company that administered the survey provided us with  records indicating that of those offered the survey, 1,572 right party  contacts agreed to be transferred to the automated survey system from  November 27, 2006, through February 28, 2007. Of these, records further  indicate that 1,011 individuals completed the survey. A consulting  company representative told us that the company was not aware, until  several months after the survey was first offered, that the PCAs had used  differing methodologies for offering the survey and that not all right party  contacts were offered it. According to IRS, it did not provide  PCAs with telephone numbers for the taxpayers as a matter of policy. As a result, in attempting to contact taxpayers by telephone, PCA  representatives tried to determine the taxpayers’ phone numbers  through electronic searches, for example, through the Lexis-Nexis  database. PCAs told us that they made a total of 252,173 outbound  connected telephone calls from September 2006 through February 2007  in an attempt to resolve the 37,030 cases referred by IRS. In an attempt to make contact with the right party, PCAs may have  contacted a substantial number of taxpayers who were not part of the  37,030 cases referred to PCAs by IRS—these taxpayers represent a  potentially large group of incorrect contacts. Examples of individuals who were not offered  the survey would include individuals who refused to provide personal  information to the PCAs and individuals who provided personal  information but were not authenticated as part of the 37,030 IRS  referrals. Those respondents who completed the entire survey had  their results counted by the consulting company.
Why GAO Did This Study

Every year the Internal Revenue Service (IRS) does not collect tens of billions of dollars in delinquent taxes. In 2004, Congress authorized IRS to use private collection agencies (PCA) to help collect some of these debts. To ensure that taxpayers are treated properly and that the program achieves the desired results, IRS contracted with a consulting company to perform a survey of right party contacts--those individuals who confirmed their identity and tax debt to PCAs over the telephone. The consulting company reported overall taxpayer satisfaction ratings from 94 to 96 percent for contacts made from November 2006 through February 2007. At the request of the Chairman, House Committee on Ways and Means, GAO attempted to obtain, for the period September 2006 through February 2007, the number of tax debt cases IRS referred to PCAs, right party contacts who were offered the taxpayer survey, and right party contacts who took the survey. GAO was also asked to report any other key observations related to the PCA program and taxpayer survey. To perform this work, GAO collected information and interviewed officials from IRS, the consulting group that administered the survey, and the PCAs.

What GAO Found

According to the PCAs, 37,030 tax debt cases were referred to them by IRS from September 2006 through February 2007. PCAs reported making contact with, and authenticating the identity of, 13,630 right party contacts. Of these, 6,793 were eligible to take the taxpayer survey which did not start until the end of November 2006. According to the consulting company, the validity of the survey was based on the key underlying assumption that all right party contacts would be offered a chance to take the survey. However, GAO could not determine the number of right party contacts offered the survey because not all PCAs kept records on who was offered it. Further, the three PCAs used different methods to determine which right party contacts were offered the survey. The consulting company that administered the survey told GAO that between November 27, 2006, and February 28, 2007, 1,572 of the individuals offered the survey, agreed to take the survey, and 1,011 of these individuals completed the survey. A consulting company representative told GAO that the company was not aware, until several months after the survey was first offered, that the PCAs used differing methodologies for offering the survey and that not all right party contacts were offered an opportunity to complete the survey. According to IRS, beginning in April 2007, PCAs began offering the survey to all right party contacts. Among other key observations, IRS advised GAO that they did not provide the PCAs with taxpayer telephone contact information for referred cases. As a result, in attempting to contact taxpayers by telephone, PCA representatives tried to determine the taxpayers' phone numbers through electronic searches. PCA representatives told GAO that they made a total of 252,173 outbound connected telephone calls from September 2006 through February 2007 in an attempt to make contact with the 37,030 tax debt cases IRS referred. PCAs did not offer the survey to incorrect contacts, such as individuals who provided personal information but were not authenticated as right party contacts.