Posted on Thu, Oct. 11, 2007
House votes to end IRS debt deals
By Ryan J. Donmoyer
Bloomberg News
WASHINGTON - The House of Representatives voted yesterday to repeal a federal program that lets private collectors pursue delinquent federal tax debt, sending the measure to a likely death in the Senate.
Even if it were to pass that chamber, President Bush's advisers will recommend a veto, a White House statement said.
Democrats compared private bill collectors working for the Internal Revenue Service to private contractors under scrutiny in Iraq and said they were more likely to harass and abuse taxpayers. Employees of one contractor in Iraq, Blackwater USA, are said to be responsible for the deaths of 17 civilians last month.
"If you are happy with Blackwater in Iraq, then I expect you are perfectly fine with contracting the debt collection of IRS debt to private bill collectors," said Rep. Earl Pomeroy (D., N.D.).
Republicans said private collectors were efficient and have conducted themselves professionally. They pointed to estimates by the nonpartisan Joint Committee on Taxation that repealing the program would cost the government $1 billion in revenue.
"It's rather disappointing that the majority would actually find it necessary to raise taxes elsewhere to terminate a program that is helping to close the tax gap," said Rep. Jim McCrery of Louisiana, the top Republican on the House Ways and Means Committee.
"This bill is dead on arrival in the Senate, as far as I'm concerned," said Iowa Sen. Charles Grassley, the top Republican on the Senate Finance Committee and a longtime champion of the program. "It attempts to stop a program that's brand-new, yet already working."
The use of private debt-collection agencies has been criticized by consumer advocates, the National Treasury Employees Union, and the Government Accountability Office, which object to allowing for-profit companies to carry out the government's function of tax collection.
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Showing posts with label irs privatization. Show all posts
Showing posts with label irs privatization. Show all posts
Saturday, October 13, 2007
Wednesday, April 04, 2007
Support Mounts to kill IRS Outsource Program
Support Mounts to End IRS Privatization Program
Key politicians and advocacy groups are lining up against an IRS program to privatize tax collections, as suspect contracts have raised further concerns about the effectiveness and transparency of the program.
OMB Watch has joined with the American Federation of State, County and Municipal Employees (AFSCME), Citizens for Tax Justice, and the National Treasury Employees Union (NTEU) to urge Congress to pass H.R. 695 and S. 335, bills that would end the IRS private tax collection program. In conjunction with these groups, OMB Watch sent letters to the House and the Senate making the case that this wasteful and dangerous program should be terminated immediately.
The IRS private debt collection program, authorized in 2004 and initiated in September 2006, contracts out the collection of tax debts that the IRS has identified but claims it does not have the resources to obtain. Contractors are allowed to keep 21 to 24 percent of all the money they collect, even though IRS employees could do the same work for one-eighth the cost.
Representatives controlling key committees have also made public their opposition to the private debt collection program. Rep. Jose Serrano☼ (D-NY), chairman of the House appropriations subcommittee on financial services and general government, repeated his intention to end the program at a March 28 hearing. At that hearing, Treasury Secretary Henry Paulson gave a muted defense of the program, acknowledging concerns about cost and taxpayer rights that Bush administration officials had previously denied. Paulson did not recommend repealing the program, but signaled he would not strongly oppose repealing it. "It's a hard one for me to feel strongly about," Paulson said in a recent TaxAnalysts article.
In addition, Chairman of the House Ways and Means Committee Charles Rangel (D-NY) has stated his intention to repeal the IRS privatization program and asked that the IRS not issue any more contracts to private debt collectors. Rangel's interest is most likely in moving forward with H.R. 695, which is co-sponsored by Reps. Chris Van Hollen (D-MD) and Steve Rothman (D-NJ) with bipartisan support.
Rangel said his immediate concerns over the program stem from a suspicious denial by the IRS to renew one of the current debt collector's contracts. The contractor — Linebarger Goggan Blair & Sampson — is a debt collector based in Texas. Some of the firm's employees have been convicted of bribing public officials, and the firm itself is currently being sued for similar behavior, as the New York Times reported in August 2006.
Neither the IRS nor Linebarger have explained why the contract was not renewed. A tax expert in San Antonio, where Linebarger has offices, speculated that Linebarger may have had trouble recovering the tax debts, making the contract less profitable. Private contractors do not have the legal authority to compel tax payment if a debtor refuses to cooperate.
IRS Taxpayer Advocate Nina Olson has found data suggesting private collectors have only successfully obtained payments from 20 percent of the cases IRS gave them. The IRS has not released information explaining what has happened to the vast majority of cases given to private collectors. Olson said that given the lack of data, it is impossible for the public to evaluate the program. On the other hand, a report by the Treasury Inspector General for Tax Administration has found that IRS has taken enough steps to protect taxpayer rights and ensure that the debt collection program is monitored for effectiveness. The report urged further action in computer security and how the IRS tracks data on taxpayers who request to deal with IRS agents instead of private contractors, among other concerns
Key politicians and advocacy groups are lining up against an IRS program to privatize tax collections, as suspect contracts have raised further concerns about the effectiveness and transparency of the program.
OMB Watch has joined with the American Federation of State, County and Municipal Employees (AFSCME), Citizens for Tax Justice, and the National Treasury Employees Union (NTEU) to urge Congress to pass H.R. 695 and S. 335, bills that would end the IRS private tax collection program. In conjunction with these groups, OMB Watch sent letters to the House and the Senate making the case that this wasteful and dangerous program should be terminated immediately.
The IRS private debt collection program, authorized in 2004 and initiated in September 2006, contracts out the collection of tax debts that the IRS has identified but claims it does not have the resources to obtain. Contractors are allowed to keep 21 to 24 percent of all the money they collect, even though IRS employees could do the same work for one-eighth the cost.
Representatives controlling key committees have also made public their opposition to the private debt collection program. Rep. Jose Serrano☼ (D-NY), chairman of the House appropriations subcommittee on financial services and general government, repeated his intention to end the program at a March 28 hearing. At that hearing, Treasury Secretary Henry Paulson gave a muted defense of the program, acknowledging concerns about cost and taxpayer rights that Bush administration officials had previously denied. Paulson did not recommend repealing the program, but signaled he would not strongly oppose repealing it. "It's a hard one for me to feel strongly about," Paulson said in a recent TaxAnalysts article.
In addition, Chairman of the House Ways and Means Committee Charles Rangel (D-NY) has stated his intention to repeal the IRS privatization program and asked that the IRS not issue any more contracts to private debt collectors. Rangel's interest is most likely in moving forward with H.R. 695, which is co-sponsored by Reps. Chris Van Hollen (D-MD) and Steve Rothman (D-NJ) with bipartisan support.
Rangel said his immediate concerns over the program stem from a suspicious denial by the IRS to renew one of the current debt collector's contracts. The contractor — Linebarger Goggan Blair & Sampson — is a debt collector based in Texas. Some of the firm's employees have been convicted of bribing public officials, and the firm itself is currently being sued for similar behavior, as the New York Times reported in August 2006.
Neither the IRS nor Linebarger have explained why the contract was not renewed. A tax expert in San Antonio, where Linebarger has offices, speculated that Linebarger may have had trouble recovering the tax debts, making the contract less profitable. Private contractors do not have the legal authority to compel tax payment if a debtor refuses to cooperate.
IRS Taxpayer Advocate Nina Olson has found data suggesting private collectors have only successfully obtained payments from 20 percent of the cases IRS gave them. The IRS has not released information explaining what has happened to the vast majority of cases given to private collectors. Olson said that given the lack of data, it is impossible for the public to evaluate the program. On the other hand, a report by the Treasury Inspector General for Tax Administration has found that IRS has taken enough steps to protect taxpayer rights and ensure that the debt collection program is monitored for effectiveness. The report urged further action in computer security and how the IRS tracks data on taxpayers who request to deal with IRS agents instead of private contractors, among other concerns
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