Source: Joe Davidson, Washington Post, July 6, 2018
In its zeal to privatize important parts of the government, the Republican-controlled Congress directed the Internal Revenue Service to use private debt collectors for certain tax delinquencies, a program that began last year. The Obama administration cautioned against the use of bill collectors before legislation authorizing the program passed in 2015. Those warnings went unheeded. Now, the program is losing money and unfairly hitting the poor. The National Taxpayer Advocate Service, an independent office within the IRS, says using private bill collectors “has yet to generate net revenues, continues to unnecessarily burden taxpayers experiencing economic hardship and produces installment agreements with high default rates.” In a report to Congress last week, Taxpayer Advocate Nina E. Olson said the private debt collection program “has yet to break even. About 2 percent of the dollars assigned for collection have been collected thus far.” …
Related:
I.R.S. Paid $20 Million to Collect $6.7 Million in Tax Debts
Source: Patricia Cohen, New York Times, January 10, 2018
Private debt collectors cost the Internal Revenue Service $20 million in the last fiscal year, but brought in only $6.7 million in back taxes, the agency’s taxpayer advocate reported Wednesday. That was less than 1 percent of the amount assigned for collection. What’s more, private contractors in some cases were paid 25 percent commissions on collections that the I.R.S. made without their help, according to the annual report by Nina E. Olson, who heads the Taxpayer Advocate Service, an independent office within the I.R.S. While Republicans have been the most vocal proponents of privatizing public services, congressional Democrats are equally responsible for the I.R.S.’s program. Despite the pointed failure of similar efforts in the past, Congress passed a law in 2015 requiring the I.R.S. to use outside contractors to make a dent in the $138 billion that taxpayers owe the government. The outsourcing began last April. Since then, the report stated, “the I.R.S. has implemented the program in a manner that causes excessive financial harm to taxpayers and constitutes an end run around taxpayer rights protections.” …
I.R.S. Enlists Debt Collectors to Recover Overdue Taxes
Source: Jessica Silver-Greenberg and Stacy Cowley, New York Times, April 20, 2017
The Internal Revenue Service is about to start using four private debt-collection companies to chase down overdue payments from hundreds of thousands of people who owe money to the federal government, a job it has handled in house for years. Unlike I.R.S. agents, who are not usually allowed to call delinquent taxpayers by telephone, the outside debt-collection agencies will have free rein to do so. Consumer watchdogs are fearful that some of the nation’s most vulnerable taxpayers will be harassed and that criminals will take advantage of the system by phoning people and impersonating I.R.S. collectors. …