Private bill collectors will handle IRS tax accounts

I've been hearing for years about how the groundwork for privatization of IRS tax collection was being laid by underfunding and understaffing the IRS.

A 1996 pilot study was ended because it lost money. Nonetheless the complete implementation is now going forward.

Despite bipartisan opposition, authorization was to do this was included in the American Jobs Creation Act of 2004 signed in October. It appears that Bush will not delay his use of the authority. Now the IRS will begin handing over tax accounts to private debt collection agencies for tax collection. The agencies will retain 25% of all monies collected and will handle the easiest cases.

In March, the National Treasury Employees Union was pointing out the dangers of the plan, specifically mentioning previous failures.
"Last week's indictments against former employees of the Pittsburgh-based Mellon Bank allege five men and one woman hid and then destroyed about 80,000 federal tax returns with payments to the government of more than $1 billion."

"Union: Charges cloud IRS outsourcing"
http://washingtontimes.com/upi-breaking/20050328-033349-3660r.htm

Two days ago with this headline from The Boston Herald, more groundwork:
"Study: Cheaters stiff IRS out of $300B"
http://business.bostonherald.com/businessNews/view.bg?articleid=78188

And again today from The Kansas City Star, more justification:
"Tax cheaters cost U.S. billions
Gap equals ‘surtax' of $2,695 for honest taxpayers"
http://www.kansascity.com/mld/kansascity/news/local/11396859.htm

Within hours Faux news was reporting its own version of the privatization story. Go find your own link on that one.

The Seattle Times has this summary from last Sunday:
"IRS getting new ally: collection agencies"
http://seattletimes.nwsource.com/html/businesstechnology/2002236764_irs10.html

We also have an earlier DU link:
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=132&topic_id=1714464

almost anything we've seee so far.

I didn't read all the links in your post, but I question just how valid this is as a possibility.

There are sooo many problems with it.
1. Their tactics are a lot of times illegal.
2. They don't know the damn tax code!
3. They have no authority to collect taxes and have access to confidential information. (Yes, I know Congress could give it to them, but many people would be hysterical over that!)


I just don't see this happening!

in some states' tax dept. It could very well happen on the Federal level too.

and spent a couple of hours writing this. It's so fundamentally wrong, so fucked up in so many ways. I wanted to be sure, and I am.

1. The collection agencies and IRS claim IRS standards of behavior will be used. That's not very comforting.

2. They don't have to know the tax code -they will be handling the accounts for collection. I don't know how many times you've been to H&R Block with a difficult return, but if you did, you know that few of them know the code and they pretend to prepare returns.

3. They want to call this "collecting overdue accounts" but in my book that's still collecting taxes. It's not clear how much access to confidential information they will have. To me, the fact that one might owe back taxes seems like confidential information in itself, but I guess I'm just being old-fashioned. You think Equifax doesn't have confidential info? There's almost no such thing anymore.

It is happening, it's been happening. It's done, and if I had to guess, they have their sights set even higher.

1. Robber-baron. Do you think Bushco will hand out these contracts to their buddies? Of course.
2. Dangerous. Not only the opportunity for aggressive tactics, but wouldn't Choicepoint (for example) love to add this data to their database, AND sell this data to unscrupulous users? Can it be combined with other data (like voting records) to be politically useful? Can it be useful for blackmail purposes? You bet.

It's an excellent post, mainz_68.

This topic cuts across several issues privacy, privatization, political favors, cronyism, union busting, press manipulation, on and on. Since when did government become a money-making enterprise for some piece of shit bill collector?

It is also another predatory act that serves up the ordinary citizen on a platter. It's one more payoff for the MBNA-Debt-personal information industry, one more assault on labor unions, one more Guantanamo where rules established to protect citizens from government don't apply.

It's also been a 15-20 year project that have had the cooperation of at least a few Democrats.

Why not just offer the tax cut to the taxpayers who can't pay and negotiate the rest?

I haven't seen anything to indicate how the contracts are being awarded. And no one is admitting what the end goal is, where this all ends.

No one except the IRS is supposed to have access to any information on your tax return.

Right now, the IRS employees are the only ones authorized to see your tax records.

just the amount due, that information still came from your tax return.

I am so disgusted by all the privatization. There's a reason for government. Too bad the people in government have forgotten that.

but then I got to wondering, is there any info on a tax return that isn't already in a credit report? I can't think of one.

Per se? Scabbers. Is there nothing this administration doesn't want to privatize?

shrink the gov't to drown it tactic

Right out of the playbook
nominated

this reapeatedly when the budget came out. but looks like he forgot his mantra when it comes to this program!!

.....A 1996 pilot study was ended because it lost money. Nonetheless the complete implementation is now going forward.

Despite bipartisan opposition, authorization was to do this was included in the American Jobs Creation Act of 2004 signed in October. It appears that Bush will not delay his use of the authority. Now the IRS will begin handing over tax accounts to private debt collection agencies for tax collection. The agencies will retain 25% of all monies collected and will handle the easiest cases.

In March, the National Treasury Employees Union was pointing out the dangers of the plan, specifically mentioning previous failures.

or tax-farming...

Outsource the task to the lowest bidder, they recoup their costs etc.

One of the key symptoms of an empire on the brink of collapse.

Basic tasks cannot be completed by the government elected to the task...

Wow...

just before the French revolution. When a government or state gives up control of revenue collection it is a sure sign that soon it will cease to exist at all.

I would bet any amount of money the firm that gets chosen is a heavy contributor to the GOP.....

Debt collection is one of the most heavily Republican, right wing, racist sectors. I know they put on a "professional" face, BS, but find a link and follow it until you get to the forums where people talk about life on the inside, or life on the receiving ends of their calls. Phenomenal untold injustice.

No, seriously.

Those of you who are up on your Bible lore know that tax collectors were one of the groups of people who were despised and whom Jesus was criticized for associating with.

The reason was that the Roman government used only private tax collectors and paid them a percentage of the taxes they collected. In those days of spotty communications and low literacy, it was easy for a tax collector to tell someone that they owed 25 shekels when they really owed 20 and to pocket not only the commission but the "unofficial" extra tax.

might be the tactic of information and techno/legal overload that gets shoveled out there. It's easy, just create a system that's arcane and somewhat unpredictable. Then everyone at some point gets that feeling of being illiterate and isolated -and especially the elderly and the poor-and ends up saying at some point "Just tell me what I owe and I'll pay it.

Or they beg for a flat tax.

This time its the average Joe America that is going to get the treatment.

How long before America wakes up and realizes that BushCo has declared war on middle/working class America?

From Ohio no less,

State going back years to collect income tax owed, often by seniors

" You could be Bernice Valek. The state's top lawyer is after the 79-year-old Parma Heights woman for a few hundred dollars in delinquent taxes dating to the Carter administration.

"Why are they after me now?" Valek asked. "I've been in this apartment building since my husband died 16 years ago, and I never heard anything from any of them until last year."

She can't prove whether she paid the taxes because she can't find the old tax returns. She asked her husband's employer for his W-2 statements but they keep them for only six years. "

http://www.cleveland.com/news/plaindealer/index.ssf?/base/news/1113557460251571.xml

Going after some poor old woman. I wonder if the tax collector will spend as much time going after corporations.