IRS plan to use private tax collectors runs into snags
Source: By Kevin McCoy, USA TODAY, 5/4/2006 2:19 AM ET
A private debt-collection firm tapped by the IRS to seek repayment from Americans who owe back taxes has been tangled in legal controversy, including a bribery scheme involving a collection contract in Texas and a federal investigation of another collection deal in Louisiana. Linebarger Goggan Blair & Sampson, an Austin law firm, was one of three firms chosen from among 33 bidders in March for the potentially lucrative IRS contract to attempt collection of an estimated $1.4 billion in tax debts over 10 years. ......But the plan has been placed on temporary hold amid a challenge of the IRS selection decision by one of the unsuccessful bidders. Filed with the Government Accountability Office in March, the challenge asserted that:
•A former Linebarger partner was convicted in a 2002 bribery scheme involving payments to two San Antonio city councilmen who voted to approve a collection contract with the law firm.
•In 2004, Linebarger settled a lawsuit in which a competitor alleged that the law firm offered illegal gifts and bribes, and rigged bids to win collection contracts from several local governments.
•A collection contract that the city of New Orleans awarded to Linebarger and a Louisiana partner organization in 1998 "has been the subject of an FBI investigation."
Additionally, a USA TODAY review of the IRS debt-collection plan shows that one of the unsuccessful bidders had a collection contract suspended in Ohio, and another was accused of making illegal campaign contributions in Texas.