By Shannon Buggs, Houston Chronicle
Sometime this month, the Internal Revenue Service will ask debt collection agencies to submit bids to chase down delinquent taxpayers.
By the summer, the IRS expects to roll out a limited version of a new program, then, in January, fully implement the program nationwide.
Collecting taxes has long been a job only federal government workers could do. But the American Jobs Creation Act of 2004 gave the IRS permission to privatize this quintessential government function.
The IRS tested private collections in a 1996 pilot program that was scrapped in 1997 because it lost money.
Now the IRS wants to try it again, but on a bigger scale.
Three major changes
Things are supposed to go better this time because of three significant changes between the current proposal and the pilot:
- Debt collection agencies will try to resolve the collection cases. In the 1996 test, the agencies only reminded tax scofflaws about their overdue tax payments and suggested payment options.
- The IRS will pay the debt collection agencies based on a percentage of the dollars they help collect, instead of the flat fee paid to the pilot agencies for locating and contacting taxpayers, regardless of whether that communication resulted in a payment. The current proposal is 25 percent.
- The IRS will electronically transmit taxpayer and debt information to the collection agencies, unlike in 1996 when the agency’s computers could not communicate such data to outside computers.
For this complete story, please visit http://www.chron.com/cs/CDA/ssistory.mpl/business/mym/3114752.
