Douglas Tax Blog. U.S.A.
Is IRS has been preparing to use private debt collectors for some time now. Its been a long time since the IRS used private debt collectors, in fact you would have to go back to President George H.Bush’s time in office to see what happened when that occurred. Back then, Congress was clamoring for the private sector to take on the tasks of the IRS, and it ended up a mess.
When they tried to privatize tax collection under Bush Jr., many horror stories came out regarding abuse at the IRS. Once those stories took hold in the public realm, Congress held some hearings on the matter, and that was all she wrote. It was an experiment gone bad, and now nearly two decades later, they are at it again. History is often lost on past generations, but this is a tad less than 18 years ago !
The problem with private debt collectors is that they never recognize the Federally protected Taxpayer Bill of Rights. They step on those rights in an attempt to collect money, usually a few citizens file a lawsuit, then the process of private debt collectors get shelved and we go back to square one. Why Congress cannot remember this failed experiment is beyond comprehension. It truly puzzles the imagination when one considers that the IRS is one of the few federal programs that returns a healthy dividend, as one dollar spent on the IRS generates roughly five dollars in revenue.
If Congress wanted to increase the Revenue of the Treasury Department, maybe they should ask the IRS and Treasury what they think, as both have suggested increased funding to appropriate levels. Instead, Congress has bowed to political pressure and decreased funding to the IRS for nearly two decades. The number of employees at the IRS has steadily dropped, even though technological improvements have taken the place of some of those people, the IRS needs to be funded properly.
Private debt collectors will only go back to the same tactics they used before, and you can expect litigation to follow, then the idea will eventually be shelved again. Maybe the second time around, Congress memory will become clearer.