GOP's Pet Project: Privatized collection costs IRS more than it raises

[BurtWorm]

http://www.washingtonpost.com/wp-dyn/content/article/2008/04/14/AR2008041402808_pf.html

Collectors Cost IRS More Than They Raise

By Lyndsey Layton and Christopher Lee
Washington Post Staff Writers
Tuesday, April 15, 2008; A01

The Internal Revenue Service expects to lose more than $37 million by using private debt collectors to pursue tax scofflaws through a program that has outraged consumers and led to charges on Capitol Hill that the agency is wasting money for work that IRS agents could do more effectively.

Since 2006, the agency has used three companies to go after a $1 billion slice of the nation's unpaid taxes. Despite aggressive collection tactics, the companies have rounded up only $49 million, little more than half of what it has cost the IRS to implement the program. The debt collectors have pocketed commissions of up to 24 percent.

Now, as Americans file their 2007 taxes, Democratic leaders want to end the effort.

"This program is the hood ornament for incompetence," said Sen. Byron L. Dorgan (D-N.D.), a leading critic who has introduced a bill to stop the program. The measure has 23 co-sponsors, all but one of them Democrats. "It makes no sense at all to be turning over these tax accounts to private tax collectors that end up costing the taxpayers money."

...

After years of lobbying by the private collection industry, the Republican-controlled Congress created the program in 2004. The goal was to use collection agencies to close the relatively easy cases the IRS said it did not have the staff to handle: instances in which the taxpayer is not disputing the debt and in which the amount owed is relatively modest. Supporters hoped that the program would eventually be expanded to take over more of the agency's debt-collection duties, and the IRS predicts that the program will break even by 2010.

Three firms were awarded contracts: Pioneer Credit Recovery, based in the western New York district represented by Rep. Thomas M. Reynolds (R), who supported the program and recently announced his retirement; the CBE Group of Waterloo, Iowa, the home state of Sen. Charles E. Grassley (R), who helped create the program; and Linebarger Goggan Blair and Sampson, a law firm based in Texas, home to President Bush.

...

[Fredster]

1. It never ends does it

How much ruin will people have to endure before they come to understand
the evil that this party of greed has brought into the world

[HowHasItComeToThis]

2. REPUBLICAN MOTTO

DON'T SHADE YOUR EYES, JUST PRIVATIZE

[MidwestTransplant]

3. Yes but I thought outsourcing was always more efficient than having the government do things?

Color me confused. Makes one wonder

[aquart]

4. Which Republican wives and brother-in-laws run the collection agencies?

Just a thought that ran swiftly thru my mind.

[BurtWorm]

5. kick