AFSCME Privatization Update

Source: Associated Press (DC), May 6, 2008 - 8:46am

The D.C. finance office will scrap a $120 million computerized tax system that was strongly criticized by auditors.

According to a report obtained by The (Washington) Examiner, the automated system routinely fails and forces workers to create duplicate reports by hand. The report says the system has left the city open to corruption and cost millions of dollars in uncollected revenue.

A spokesman for Accenture says auditors hired by the city did not understand the high-tech system, which led them to make critical errors.

Posted by Info Center at 3:15 PM in Horror Stories | Information Technology | Tax Collection | Permalink
Tags: District of Columbia

Source: DAN WALTERS, Sacramento BeeScripps News (CA), April 4, 2008

A California employee union is complaining about an embryonic scheme in the state Board of Equalization to hire one or more private collection firms to track down those who owe taxes to the state.

The Service Employees International Union says the state's own tax collectors could do the job just as well, for far less cost, if they were equipped with up-to-date tracking tools.

...... Just a couple of months ago, for instance, LGBS was fired by the city of Chicago after it was revealed that it had bankrolled a vacation trip for the city official who oversaw its contract to collect unpaid parking fines, which had generated $33.6 million in commissions for the firm.

Posted by Info Center at 2:58 PM in Tax Collection | Permalink
Tags: California

Source: Windsor Genova, AHN News, January 29, 2008 8:38 p.m. EST

Seventeen senators on Tuesday expressed support to an Internal Revenue Service union's call for the agency to end the use of private tax collectors.

...... The National Treasury Employees Union (NTEU) quoted Dorgan as saying in the letter, "While we understand and commend efforts to ensure that all taxpayers pay their fair share of taxes, we believe tax collection is an inherently governmental function that should only be performed by trained and proficient IRS employees."

Posted by Info Center at 1:41 PM in Federal | Tax Collection | Permalink

Source: By Stephen Barr, Washington Post, Thursday, October 11, 2007

The House voted yesterday to kill an Internal Revenue Service program that uses private companies to track down delinquent taxpayers and lets the companies keep a percentage of the taxes they collect. The vote, generally on party lines, was 232 to 173.

....... Meanwhile, the White House yesterday threatened a veto, saying that the private collectors bring in taxes "that are otherwise not likely to be collected by the IRS."

Posted by Info Center at 3:37 PM in Federal | Tax Collection | Permalink

Source: OMB Watch, July 24, 2007

Both the House and Senate have taken important steps toward ending the wasteful and risky Internal Revenue Service (IRS) private tax collection program. The House Ways and Means Committee approved a bill (H.R. 3056) that would repeal the program, and the Senate Appropriations Committee cleared a bill (H.R. 2829) that would tightly limit the funding available at the IRS to administer the program.

Posted by Info Center at 11:55 AM in Federal | Tax Collection | Permalink

Source: By JIM ABRAMS, Associated Press, Jun 28, 4:45 PM ET

An initiative to farm out tax collection to private agencies survived a challenge Thursday from House lawmakers who said the program was improper and should be eliminated.

.......... The IRS says it has set strict standards on the collection tactics to protect taxpayer privacy and prevent harassment. Visits to taxpayer homes are banned, as are late-night calls.

But critics say tax collection is inherently a public function and inadequate IRS resources don't justify handing over that job to private collectors. Besides the effort to curtail funding for the program, several bills have been introduced in the House and Senate to kill it outright.

Posted by Info Center at 10:30 AM in Federal | Tax Collection | Permalink

Source: By DANIEL FRIEDMAN, Federal Times, May 24, 2007

Whether Congress will revoke the Internal Revenue Service’s authorization to hire private debt collectors remains to be seen, but at least one citizen has had it with the initiative. t a May 23 House Ways and Means Committee hearing on the program, Democrats played recordings of calls to a debtor from employees at CBE Group, one of two private companies contracted through an IRS pilot program to collect small tax debts for commissions.

Employees left voice mails identifying themselves by first name only and telling the unnamed debtor to call a toll-free number regarding a “personal business matter.” When he called to demand an end to the “harassment,” an operator politely declined to provide information on the company until the man confirmed his Social Security number or address. The caller refused due to concerns about identify theft.

Posted by Info Center at 10:32 AM in Federal | Tax Collection | Permalink

Source: BETH DeFALCO, Associated Press (NJ), Mon, Feb. 05, 2007

A company hired to collect back taxes will reimburse New Jersey nearly $2 million it over-billed the state. Chesterfield, Mo.-based OSI Collection Services Inc. also agreed to other provisions dealing with illegal gifts it gave to Treasury Department employees, state Attorney General Stuart Rabner announced Monday.

…… Rabner also announced on Monday the indictment of two more employees of OSI Collection Services, which has been accused of submitting padded bills to the state.

Posted by Info Center at 10:51 AM in Horror Stories | Tax Collection | Permalink

Source: GAO-06-1065, September 29, 2006

In 2005, the inventory of tax debt with collection potential had grown to $132 billion. The Internal Revenue Service (IRS) has not pursued some tax debt because of limited resources and higher priorities. Congress has authorized IRS to contract with private collection agencies (PCA) to help collect tax debts. IRS has developed a Private Debt Collection (PDC) program to start with a limited implementation in September 2006 and fuller implementation in January 2008. As requested, GAO is reporting whether (1) IRS addressed critical success factors before limited implementation, (2) IRS will assess lessons learned before fuller implementation, and (3) IRS's planned study will help determine if using PCAs is the best use of federal funds.

Posted by Info Center at 1:14 PM in Federal | Tax Collection | Permalink

Source: By Kevin McCoy, USA TODAY, September 5, 2006

Beginning this week, thousands of Americans who owe taxes to the federal government will start getting phone calls to pay up — from private collection agencies, not the IRS. Despite congressional opposition and criticism from a federal employee union and a taxpayer advisory panel, the IRS is giving three collection agencies information on 12,500 taxpayers who owe less than $25,000 and have not disputed the debt.

Posted by Info Center at 3:17 PM in Federal | Tax Collection | Permalink

Source: Associated Press, Tuesday, August 22, 2006

As the Internal Revenue Service prepares to implement a new program that sends private debt collection agencies after delinquent taxpayers, critics — including several lawmakers and the employee union at the Treasury Department — are gearing up to protest it. Opponents say that the IRS will pay private debt collectors more to do what government-paid employees could do and that the agency is not doing enough to let the public know about the new program, set to launch in early September.

Posted by Info Center at 2:01 PM in Federal | Tax Collection | Permalink

Source: By PAUL KRUGMAN, New York Times (subscription req.), August 21, 2006

Yesterday The New York Times reported that the Internal Revenue Service would outsource collection of unpaid back taxes to private debt collectors, who would receive a share of the proceeds.

It’s an awful idea. Privatizing tax collection will cost far more than hiring additional I.R.S. agents, raise less revenue and pose obvious risks of abuse. But what’s really amazing is the extent to which this plan is a retreat from modern principles of government. I used to say that conservatives want to take us back to the 1920’s, but the Bush administration seemingly wants to go back to the 16th century.

And privatized tax collection is only part of the great march backward.

Related article:

I.R.S. Enlists Help in Collecting Delinquent Taxes
By DAVID CAY JOHNSTON
New York Times
August 20, 2006

If you owe back taxes to the federal government, the next call asking you to pay may come not from an Internal Revenue Service officer, but from a private debt collector. Within two weeks, the I.R.S. will turn over data on 12,500 taxpayers — each of whom owes $25,000 or less in back taxes — to three collection agencies. Larger debtors will continue to be pursued by I.R.S. officers.

Posted by Info Center at 10:17 AM in Federal | Tax Collection | Permalink

Source: by Glen Shapiro, LawAndTax-News.com, New York, 08 June 2006

An amendment put forward by Rep. Steve Rothman (D-NJ) designed to prevent the IRS from putting in place measures to outsource tax collection on Tuesday garnered bipartisan support. ...........

"With personal identity theft on the rise, it makes no sense to hand over 2.65 million taxpayer files to private debt collection companies. I am proud that my colleagues joined me in saying 'no' to President Bush's harebrained idea to create a new, privatized tax collection system. It would cost taxpayers more while protecting their personal financial information less," Rothman announced following the vote.

Posted by Info Center at 10:34 AM in Federal | Tax Collection | Permalink

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.

Posted by Info Center at 10:45 AM in Federal | Tax Collection | Permalink

Source: Loren Moreno, Honolulu Advertiser (HI), Friday, January 13, 2006

It could cost the state at least $3.6 million to set up a new system to allow a private company to collect the general excise tax on behalf of the city and the state, said Kurt Kawafuchi, director for the state Department of Taxation. And while Kawafuchi supports the idea, he may be one of the few. For many others, a proposed agreement between the city and the state to privatize the collection of the general excise tax is the latest example of "bad public policy." Under the proposal unveiled Wednesday during a City Council Budget Committee hearing, a private company would collect the 4 percent general excise tax and the city's 0.5 percent surcharge. ….. But Randy Perreira, deputy executive director of the Hawai'i Government Employees Association, said the plan would have no effect on the existing government workforce. Instead, he said the proposal is "stupid."

Posted by Info Center at 11:06 AM in Tax Collection | Permalink