IRS Plan To Outsource Tax Collection Raises Security Concerns

[Judi Lynn]

IRS Plan To Outsource Tax Collection Raises Security Concerns

The agency plans to hire three contractors to track down deadbeat taxpayers. But the Government Accountability Office and the National Treasury Employees Union have questioned the IRS's ability to properly manage contracted employees.

By Larry Greenemeier
InformationWeek

Jan 13, 2006 11:00 AM

The Internal Revenue Service by March expects to award contracts to three private-sector companies to help the agency improve its ability to track down deadbeat taxpayers. Yet despite carefully worded security stipulations written into the IRS's request for quotes from prospective contractors, concerns remain regarding the government and the business world's ability to adequately protect sensitive information.

President Bush gave the IRS the power to use private-sector contractors when he signed the American Jobs Creation Act in October 2004. The act created Section 6206 of the Internal Revenue Code permitting contractors to be used to help collect taxes in cases where the tax owed is not in dispute. The IRS, which started looking for contractors last October, says using them for debt collection will help increase the amount of tax liabilities collected each year, leading to an estimated additional $1.4 billion dollars in tax revenue over the next 10 years.
(snip)

The contractor program will run on a trial basis for a year after the contracts are awarded, with the option for another year if all goes well. Full program implementation is planned for January 2008. The contractors will help the agency collect a portion of the estimated $12 billion in taxes individuals have acknowledged they owe but have not paid. The contractors stand to receive up to 25% of the tax money they help to collect.
(snip)

Sebastian's letter also notes that at three IRS service centers his group investigated, some contractors were granted staff-like access to restricted areas, including IRS-owned or controlled facilities, information systems, security items and products, or sensitive but unclassified information, despite not having undergone background investigations. This increased the risk that "taxpayer receipts and information could be lost, stolen, misused, or destroyed," Sebastian wrote. During his team's fiscal year 2004 audit, they found the IRS didn't submit new security clearance paperwork for 10 contractors until four years after the contractors had already been granted staff-like access.
(snip/...)

http://www.informationweek.com/security/showArticle.jhtml?articleID=175804101

(This was a VERY slow loading article for me. It could be my computer, but I doubt it.)

[formercia]

1. This is ripe for ID theft.

find the deadbeats with money and take them to the cleaners.

[asjr]

3. We, the People, are being outsourced to the corporations.

And it seems we can do nothing about it. By election 2008 this country will not be recognizable.

[woodsprite]

5. By 2008, alot of us will probably be in concentration camps. n/t

[colonel odis]

13. they won't be able to take our money if we're in concentration camps.

[havocmom]

6. IRS has already been outsourcing some tax return processing

google tax returns + outsourcing and get:

"1,320,000 for tax returns + outsourcing. (0.24 seconds) "

Been sending more and more returns to India for several years now.

Yep, lots of hands on the paper, lots of transferring of files surly does open people to the risk of all sorts of fraud/identity theft problems, let alone just plain ol privacy considerations.

And, next time you buy or re-fi a house, keep in mind that more and more mortgage processing is outsourced to overseas companies in nations which might not have the same privacy laws as the US (used to have).

Planning a trip? Making reservations for air, hotel, car? Guess what...

Got lots of frequent flier miles racked up and need some info on your account? Making a call to your flier service call center? A friend who works for United's service, Mileage Plus is about to become unemployed. Guess why.

Lower pay is not the only reason for corporations to outsource. There are places where worker, work place, and consumer protection laws are just not a major concern. Guess where the corporations are gonna go.

Yeah, personal identity is gonna be secure... NOT. Think about it, folks, then start making noise to MSM and Congress Critters about your displeasure at how Americans are made vulnerable by corporate greed.

Your tax return, something you are required by law to file, is likely to be turned over to a PRIVAT CORPORATION, zapped around the globe to who-knows-who and vulnerable to heaven only knows what sort of hacking/intercepting.

Safer than you were 6 years ago? Not hardly!

[RufusEarl]

2. Outsource!

It's also part of the Bush plan to dismantle our federal government.

[htuttle]

4. This will fail

Private bill collectors aren't NEARLY as terrifying as IRS agents.

[havocmom]

7. And not nearly as well supervised

Be afraid. Be very afraid.

Two words:
Bounty hunters

[kineneb]

10. true, but...

if they come hunting for you, and you "hunt" first, you cannot be accused of injuring a federal employee...

[havocmom]

12. If it is done at the behest of the federal government, maybe still trouble

And if they are given license like the mercs in NOLA... They could justify any errors as saving the taxpayers the cost of a trial.

We have entered the level of law enforcement being outside of and beyond public oversight. THAT is a serious problem. When corporations do the policing, who do you think will wield the power?

[Nickster]

8. Oh great, Halliburton is getting into the tax business too??

[Benhurst]

9. The merging of the state with corporations: fascism. nt

[grahamhgreen]

11. Those who collect the taxes control the government

In fact, we tried it in 1798 and it did not work...

Found this here - <http://www.hbtlj.org/content/v05/v05Resnickar.pdf>

On October 22, 2004, President Bush signed into law the
American Jobs Creation Act often referred to as the corporate
tax-cut bill.
1
Buried in the 633 page American Jobs Creation Act
are provisions that allow the IRS to use private debt collection
companies (PCAs) and private law firms in the collection of
delinquent taxes.
2
This follows a pilot program that was
authorized by Congress and tested in 1996.
3
After the initial
pilot, the Clinton Administration opposed renewal of the
program.
.........

A. Historically
The use of private debt collectors to collect revenue, while
novel in the modern era, is not entirely foreign to United States.
The early history of the United States includes the use of
“collectors of internal revenue” to collect tariffs and excise taxes
on distilled spirits.
7
These collectors were a class of agents
authorized in 1798 who received a percentage of the money
collected.
8
The first documented case of contracting out for tax
collection occurred in 1872, “when the Secretary of the Treasury
hired John Stanborn to collect excise taxes from thirty-nine
whiskey manufactures and merchants.”
9
Sanborn was
compensated by half of the revenue collected.
10
He continued to
work until 1873 accumulating more than $200,000 in personal
gain.
11
Sanborn’s enterprise came to an end in 1873 with a
Congressional investigation concluding that such contracts were
improper.
12
Until the recent IRS pilot, this was the last instance
of private collectors for tax debt in the United States.

[OldLeftieLawyer]

14. Well, then,

why don't we outsource our Presidency?

I'm going to vote for Prince Charles and Princess Not-Diana. Imagine the dinner parties they'll throw!!! Imagine the culture that will take over the White House!!! Imagine the fabulous menus and jewels!

Why, I bet there'll even be dancing after dinner!!!

Yep, Prince Chuck's my guy.

[Gman]

15. How long does it take to burn through $1.4 billion in Iraq?

What, 10 minutes?

[bleedingheart]

16. They are going to PAY collectors 25% of US tax delinquencies they collect

whoa nelly....that is a load of cash...you think they won't get mean...think again... I can't imagine the far reaching authority they may even grant these sharks.