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WASHINGTON — The Internal Revenue Service must improve oversight of a new program using private agencies to collect taxes before expanding the effort, congressional investigators say.

Critics of the program said Tuesday that the Government Accountability Office report supported arguments that the tax agency is moving too quickly to incorporate an unworkable program.

"I've been concerned all along about the use of private contractors to collect federal taxes," said Sen. Max Baucus of Montana, top Democrat on the Senate Finance Committee who requested the GAO study with committee chairman Charles Grassley, an Iowa Republican. "Tax collection is an inherent government function and the IRS ought to take care of it in-house."

The IRS, responding to congressional legislation, in September initiated the private debt collection program, contracting with three companies. The IRS plans to expand the program to up to 12 private collection agencies, with a goal of collecting some $1.4 billion in back taxes over the next decade.

The GAO report commended the IRS for addressing some important factors for the success of the program, such as proper training for collection agency employees.

But it said the agency has yet to complete critical work on setting results-oriented goals and measures and determining private debt collection program costs.

The IRS lacks criteria to assess "whether the program performance warrants expanding the number of private collection agencies," it said.

The report cited preliminary IRS data showing that the three companies expected to collect $56 million to $92 million through the end of next year, at a cost of $61 million. Under the program, the private agencies are entitled to up to 24 percent of the tax money they collect.

The IRS program, said Colleen M. Kelley, president of the National Treasury Employees Union, the largest independent federal union, "is a direct handout to the private sector, which won't generate an appreciable return to the Treasury and will cost taxpayers money."

IRS Commissioner Mark Everson, in a statement responding to the GAO report, said he agreed with the recommendations to set more concrete guidelines for the program and said the agency had begun to carry out those recommendations.