IRS Hands Over Some Control
By Sara Hatch
WASHINGTON, April 12 – Rep. Rep. Rob Simmons, R-Conn., warned Wednesday that the Internal Revenue Service’s plan to privatize delinquent tax collections will “increase the risk of wrongful disclosure” of taxpayer information.
Simmons spoke as the IRS prepared to turn over its first round of delinquency cases to private contractors for collection.
“If the IRS is to engage in such outsourcing, I am concerned about the possibility that millions of taxpayer files will be made available to private debt collection companies,” Simmons said in a statement.
“And with 26 million Americans already finding themselves victims of identity theft over the past 15 years, furnishing more taxpayer data to dubious third parties will only increase the risk of wrongful disclosure of such data,” Simmons said. “All of us want a system that efficiently collects federal taxes, but we cannot do it at the expense of taxpayers’ rights or privacy.”
Three companies were recently picked to carry out some of the services the IRS traditionally does but right now does not have the resources to do. The three are the CBE Group Inc., of Waterloo, Iowa; Linebarger Goggan Blair & Sampson LLP of Austin, Texas; and Pioneer Credit Recovery Inc. of Arcade, N.Y.
In a March 9 th statement, IRS Commissioner Mark Everson described the program.
“The vast majority of states use private firms to help collect delinquent taxes,” he said. “The new authority that Congress gave to the federal government allows us to use private firms as well. We have carefully considered all of the concerns expressed about this project, which involves work traditionally done by the government.”
The IRS will turn over the first of these cases this summer. In 2004, Congress authorized the IRS to outsource its delinquent tax collections under the 2004 American Jobs Creation Act. All employees of the private firms who work on tax collections will undergo a “mandatory, IRS-directed training program,” according to Everson’s statement.
But some groups said that the program puts taxpayers at risk and will not be effective.
Colleen Kelly of the National Treasury Employees Union said that IRS workers could collect more taxes than private firms could and that giving taxpayer data to private companies is dangerous.
She said the IRS should be doing more to “keep [taxpayers’] private information private” and that the debt collection industry has received the most complaints of all industries.
In its statement, the IRS said private companies will be assigned only to cases where the taxpayer “has not disputed the liability,” leaving cases involving litigation, hardship, negotiated agreements and bankruptcy to IRS employees.
“Redirecting relatively simple cases to private firms will permit the IRS to focus its existing collection and enforcement personnel on more complex tax issues,” Everson said.
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