Isn't the IRS now operating like a private business.....

[whistle]

...and what about privacy, that is thrown totally out the window with this practice.

<snip>
IRS to outsource collections
Short of manpower, agency to enlist help from private firms for smaller debts

David Cay Johnston
New York Times
Aug. 20, 2006 12:00 AM

If you owe back taxes to the federal government, the next call asking you to pay may come not from an Internal Revenue Service officer, but from a private debt collector.

Within two weeks, the IRS will turn over data on 12,500 taxpayers, each of whom owes $25,000 or less in back taxes, to three collection agencies. Larger debtors will continue to be pursued by IRS officers.

The move, an initiative of the Bush administration, represents the first step in a broader plan to outsource the collection of smaller tax debts to private companies over time. Although IRS officials acknowledge that this will be much more expensive than doing it internally, they say that Congress has forced their hand by refusing to let them hire more revenue officers, who could pull in a lot of easy-to-collect money. advertisement

The private debt collection program is expected to bring in $1.4 billion over 10 years, with the collection agencies keeping about $330 million of that, or 22 to 24 cents on the dollar.

By hiring more revenue officers, the IRS could collect more than $9 billion each year and spend only $296 million, or about three cents on the dollar, to do so, Charles Rossotti, commissioner from 1997 to 2002, told Congress four years ago.
<more>

http://www.azcentral.com/news/articles/0820irs-outsource0820.html

[electron_blue]

1. NO, a business collecting debts would *not* let their biggest offenders

off the hook, which is what the IRS just did recently. They decided to audit far fewer millionaires than previously and just "trust them"

[napi21]

2. OK, what's wrong with THIS picture??????

The private debt collection program is expected to bring in $1.4 billion over 10 years, with the collection agencies keeping about $330 million of that, or 22 to 24 cents on the dollar.

By hiring more revenue officers, the IRS could collect more than $9 billion each year and spend only $296 million, or about three cents on the dollar.

First, you asked if the IRS was operating like any business? NO IT'S NOT! ANY business I am aware of calculates the cost/benefit of every decision, and almost without exception choses the lowest COST option!

The argument presented in that article doesn't even rise to the level of deserving a discussion!!!!!

[whistle]

3. What's to keep the IRS from out-sourcing tax audits as well?

...Privatize both collections and audits and nail everyone who has cheated on their taxes during the past say seven years.

[napi21]

4. Nothing of course, but THAT'S NOT THE POINT! It's obviously

much more expensive to use a third party than tohire more Fed workers! NO BUSINESS DOES THAT! Whoever thought up this foolish scheme is IMO is either looking for a skapgoat to blame for low collections, or has been told, in nouncertain terms, that he will NEVER get any additional employees, so find another way!

[whistle]

5. I agree it is cheaper for the IRS to use existing staff and hire new

...staff, and the cost/benefit analysis obviously shows that. My point here and I probably failed to make this clear in my opening post is that budget cuts and hiring freezes by the Bush administration has led to a drop in internal tax oversight. So then the congress authorizes the IRS to out-source to private collection agencies to collect back taxes.

Anyone who has had an overdue debt or gone delinquent on contracts owed to anyone know all to well the ruthless and unethical tactics used by private collection companies to harass people into paying up.

Given that the IRS and the congress has now seen fit to take this approach just like some private business, I would suspect that even more tax payers will become defiant about paying taxes. In addition, the IRS which has access to almost any information on citizens they want to get. Now any debt collection assignments turned over to private agencies will be accompanied by the same access franchise to the same information which the IRS and government has on citizens and tax payers. Now privacy rights are going to be violated even more by the government and private agents of the government.

I don't really know what studies show to be the error rate in tax form preparation by citizens and even professional tax preparers, but it is extremely high. That makes us all virtually at risk of being tax criminals and private companies can act like bounty hunters to commit fraud and cheat and harass and extort money from every working person in America. The IRS is first going to the weakest segment by assigning out collections on IRS debts of under $25,000. That tells me right there that they will continue to treat the biggest violators with soft internal IRS hands and let the collection jackals and bottom feeders take on the helpless and the powerless citizens. The timing of this is no coincidence either.

What do you think?

[napi21]

6. I don't know what the error rate is either, but I have to believe it has

been significantly reduced since the implimentation of e-filing. Now, that's not going to eliminate the fraud filings. Those I suspect is where the real money is. I'm nottoo sure how much worse the harrassment would be from a private collector v/s the Irs. The iRS collectors aren't nice people either! At least with the private agency, you have the right to say "don't call me again' and, unless Congress changes THAT law, they have to stop calling.

I also question how it could possible work as far as penalties. I THINK...a Gov't agency is the only ones with the authority to actually apply penalties, and I don't believe they can just assign them to someone else!

[havocmom]

7. Been outsourcing a lot of tax return work for several years

Google tax returns + outsourcing. It will NOT make you feel safer.