Senators Press to End IRS Privatization Program

Sen. Byron Dorgan (D-N.D.) and 16 other Senators sent a letter to the Senate Finance Committee Tuesday asking it to “examine thoroughly” the views of Internal Revenue Service commissioner-nominee Douglas H. Shulman on the agency’s program using private debt collectors to pursue tax debts.

The program has come under fire from the National Taxpayers Advocate, among others, for costing more than the program has collected. However, defenders of the program have said some of the expenses were start-up costs incurred in 2004 and 2005 before the first collections were made. Program defenders have said it will turn net positive by April of this year.

However, Dorgan in his letter opposed the IRS contracting out the work to a third party. The view is echoed by the National Treasury Employees Union, the union representing IRS workers.

“The contracting out of the inherently governmental function of collecting taxes is one of the most critical issues defining the IRS as we move forward,” Colleen M. Kelley, NTEU president wrote in a press release.

The NTEU argues the program threatens taxpayer privacy by turning over personal and sensitive tax information to “an industry that, year after year, generates the most consumer complaints to the Federal Trade Commission.”

Dorgan wrote in his letter to Finance Committee Chairman Sen. Max Baucus (D-Mont.): “While we understand and commend the 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.” Dorgan also expressed the continuing support a proposed bill in the Senate which would end the agency’s use of private tax collectors.

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