Diversified Collection Services, a Livermore, Calif. collection agency, earned $5.3 million from the state of Louisiana for working on a recent tax amnesty initiative that generated more than $460 million for the state.
The agency mailed letters, operated a phone bank and developed a Website for the two-month program that targeted delinquent taxpayers. Most of the collections came from negotiations over tax audits. Half of the interest owed was waived if taxpayers chose to settle their accounts in full.
Jarrod Coniglio, an assistant secretary for the state's Revenue Department, said DCS worked only on money that was collected from delinquent taxpayers, roughly $73 million. He said the Revenue Department handled the audits that made up the bulk of the amnesty program's proceeds. The program ended on Oct. 31, 2009.
DCS’ contract included a fixed cost of $2.3 million and a prorated amount that was capped at 10% of $75 million, Coniglio added. DCS officials declined comment. The program generated more than twice as much money as state officials expected. Part of the money will be used to help restore Louisiana’s coastline. Another $86 million will replenish the state’s "rainy day" fund. Louisiana Gov. Bobby Jindal wants to spend the rest of the money on health care, which is facing a huge budget shortfall.
