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Democrats Send Letter to Obama Calling for IRS Private Collection Shutdown
December 18, 2008
Some Democratic members of the U.S. House’s Ways and Means Committee sent a letter to President-elect Barack Obama Tuesday urging him to shut down the program that allows the Internal Revenue Service to use private debt collection agencies to recover back taxes.
Fourteen members of the committee, including its chairman and the head of its Oversight Subcommittee, signed the letter that argued collecting taxes was an inherently governmental function and that “in light of the current economic situation, it is important that the administration protect taxpayers by ensuring that they deal with the IRS directly to work through any difficulties.”
But Jeff Trinca, a representative of a group that lobbies in favor of continuing and expanding the program, said that given the current economic situation, the incoming administration should work to expand the program rather than kill it.
“Budget deficits are going to reach a record this year,” Trinca told insideARM. “If this program was fully-implemented, it could generate as much as $1 billion a year for the IRS within a couple of years.”
Trinca said that critics and decision makers on Capitol Hill and in the executive branch should look no further than the Department of Education’s private collection program for an example of successful government accounts receivable management.
ED’s current collection contract, awarded in 2004, includes 17 collection agencies. In the 44 months they have been collecting for the department, the collectors have brought in $4.67 billion ("Shakeup at Top of ED Debt Collection Competition in October ," Nov. 25).
The IRS contract, by contrast, includes just two collection agencies: CBE Group and Pioneer Credit Recovery. Initial plans called for the IRS to expand the program to 10 agencies last year, but those plans were scrapped under intense opposition from the National Treasury Employees Union and the Taxpayer Advocate.
Fourteen members of the committee, including its chairman and the head of its Oversight Subcommittee, signed the letter that argued collecting taxes was an inherently governmental function and that “in light of the current economic situation, it is important that the administration protect taxpayers by ensuring that they deal with the IRS directly to work through any difficulties.”
But Jeff Trinca, a representative of a group that lobbies in favor of continuing and expanding the program, said that given the current economic situation, the incoming administration should work to expand the program rather than kill it.
“Budget deficits are going to reach a record this year,” Trinca told insideARM. “If this program was fully-implemented, it could generate as much as $1 billion a year for the IRS within a couple of years.”
Trinca said that critics and decision makers on Capitol Hill and in the executive branch should look no further than the Department of Education’s private collection program for an example of successful government accounts receivable management.
ED’s current collection contract, awarded in 2004, includes 17 collection agencies. In the 44 months they have been collecting for the department, the collectors have brought in $4.67 billion ("Shakeup at Top of ED Debt Collection Competition in October ," Nov. 25).
The IRS contract, by contrast, includes just two collection agencies: CBE Group and Pioneer Credit Recovery. Initial plans called for the IRS to expand the program to 10 agencies last year, but those plans were scrapped under intense opposition from the National Treasury Employees Union and the Taxpayer Advocate.
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Comments
Comment from Nathan Meehling on December 18, 2008 at 1:06PM EST
I don't understand the Democrats opposition to this program. Under their rationale that collecting taxes is exclusive to the government, they could (should) expand this rationale to many other matters > nullifying many government contracts and consultant relationships. If their fear is an increased burden for consumers teetering on the brink of insolvency, then they should propose a scoring model to filter out many arguable unable to pay, and allow professional debt collectors to assist the government in recovery versus (better) endowed tax debtors. As a tax payer I want the US government to be solvent, and to utilize private industry resources at their disposal to be, remain solvent. The collection industry is an important, vibrant sector of our economy and should be recognized as such.
Comment from Anonymous on December 24, 2008 at 11:19AM EST
I would have to disagree. These people are rude and ruthless. They dont take into consideration what taxpayers financial situation. All they care about is collecting the taxes. As an IRS employee and someone that works in the collection area some people put themselves in the position that they owe but as a professional there is a certain respect you should give to people no matter if they owe the taxes or not. I dont believe in their way of thinking to harrass taxpayers and make threats to them. It should stay as a government fuction because the IRS invest a lot of money in training so that Revenue Officers like myself can handle different situations and different taxpayers. Bottomline is that they owe the money thats given, but its how the case will be resolved is what matters. AT times i do dislike to close cases as currently uncollectable but at the same time the economy is not the best. The only people that are getting bailed out is the auto and financial industries. What about the average joe. These private debt collections dont care about all that. Yes the private debt collection has helped the government collect some of the taxes, but their commission is larger then the return. If the government wanted more people collecting the taxes then they should cancell the contracts they have with the private debt collection and hire more IRS employees more Revenue Officers, they would be well trained and educated than those that are working for these private debt collections.
Comment from David Lahr on December 29, 2008 at 2:07PM EST
I would have to disagree with the anonymous comment above. It is a well known fact that the government is a bureaucracy and is far less efficient than any private business.
The notion that hiring more government workers would be more productive than a for-profit company - or that those employees would be more educated is laughable.
It seems like the democrats only motivation here is to protect union interests.