I.R.S. to Outsource Cases to Private Debt Collection Agencies

So as you may remember, the IRS is trying to turn over some of its unpaid accounts to private debt collection agencies.

This means that some tax resisters may find themselves fielding calls from the Repo Man instead of the IRS.

The Repo Man will pocket 22–24% of what they’re able to collect before forwarding the rest to the IRS. This gives tax resisters one answer to the question of “if you resist, won’t the government just add on interest and penalties and get more money than if you’d just paid ’em in the first place?”

On the other hand, I can anticipate this objection: just how different is a “private” debt collection agency doing contracts for the IRS from just another branch of federal theft enforcement? All the money isn’t going to the Treasury, but all the money is going to the “government” writ large.

IRS Commissioner Mark Everson confirms that using private debt collection agencies instead of IRS employees to chase down money means less money for Washington:

Everson told Rep. Steven Rothman, D-N.J., he agreed with an assessment that using private agencies will cost the government more.

“I admit it. I freely admit it,” Everson said.

The private agencies will get 22 to 24 percent of the tax money they collect, Everson told lawmakers on the House Appropriations subcommittee that oversees the IRS budget.

“It is wasting taxpayer money,” Rothman said. “It’s offensive to me. It’s offensive to my constituents.”

Everson disagreed that the program wastes taxpayer dollars. It’s necessary to use the private companies, he said, because hiring more IRS employees shows up on the federal budget as an expenditure. The budget doesn’t acknowledge the extra money that additional employees might collect.

The IRS must compete with other federal agencies for money at a time when deficits are increasing.

President Bush and Congress have been freezing or cutting budgets for all programs outside homeland security and defense.…

Private collectors will track down people who agree they owe taxes but haven’t paid. The trial was to start , but protests by two companies that lost their bids to do collection work caused a delay of about three months.