Saturday April 16, 2005

IRS outsourcing debt collection

rense.com -> foxnews.com

The taxman is outsourcing.

The Internal Revenue Service has gotten the go-ahead to begin contracting out to private debt collection agencies to go after uncollected federal tax payments, believed by the IRS to be around $270 billion a year ...

Though several federal agencies use private collectors to retrieve debts, the IRS was only given the authority when President Bush signed the American Jobs Creation Act of 2004 (search) in October. Despite some bipartisan effort to thwart the new policy, it was codified in the fiscal year 2005 Transportation-Treasury spending bill passed in November.

Supporters of private contractors say allowing debt collectors to go after simple delinquency cases will free the IRS to pursue the more complicated ones, particularly when such a heavy backlog exists, and will make the agency more efficient and responsive to taxpayers overall ...

But critics say private collectors, who stand to reap up to 25 percent of every successful collection, are bound to harass citizens. Furthermore, contracting out collections raises privacy concerns about handing over tax information to third parties. Finally, turning over the job to private companies puts federal workers out to pasture ...

(2005-04-16 17:45:00 SGT) [Biz] Permalink

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