Internal Revenue Service (IRS) Collection Services
Each year the Internal Revenue Service (IRS) contacts millions of taxpayers to resolve outstanding tax debts and unfiled returns. The IRS’ Collection division wanted to better understand which cases were highest payoff and how to allocate staff across its various functions to maximize collections. They also wanted to know how notices might be redesigned to motivate delinquent taxpayers to file their returns and pay past money owed.
PCG gathered taxpayer account resolution and internal process data, spanning over 3 million records and 600 caseload variables. We developed a novel segmentation scheme for prioritizing cases and developed a first-of-a-kind analysis of staff utilization. An optimization algorithm was developed to simultaneously tell the IRS which cases to work and how to assign staff to process them. The analysis also identified what inflection points in the Collection system where improvements would yield the greatest returns.
Shortly following the modeling work stream, PCG partnered with Ideas42, a behavioral science firm, to identify contextual barriers to filing returns and resolving debts. This led to recommendations for redesigning notices to increase taxpayer response.
The Collection group is using this intelligence to enhance their compliance approaches and increase the dollars collected within resource constraints.