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Boosting cough-ers: IRS moves ahead with plan for private firms to collect debt
Waterbury Republican-American ^ | August 23, 2006 | Dan Caterinicchia (A.P.)

Posted on 08/23/2006 1:21:31 PM PDT by Graybeard58

WASHINGTON -- As the Internal Revenue Service prepares to implement a new program that sends private debt collection agencies after delinquent taxpayers, critics -- including several lawmakers and the employee union at the Treasury Department -- are gearing up to protest it.

Opponents say the IRS will pay private debt collectors more to do what government-paid employees could do and that the agency is not doing enough to let the public know about the new program, set to launch in early September.

"I think taxpayers will be very offended and appalled that their tax information is being handed over to" non-IRS tax agents, said National Treasury Employees Union President Colleen Kelley, adding she has "no confidence at all" in the agency's ability to make sure the private firms are not overstepping their bounds.

The IRS acknowledges the plan will cost more than hiring additional agents to do the same work, but it points out that Congress authorized the use of such firms back in 2004. The plan is being implemented now because the IRS has money allocated for such a program and doesn't believe it can get budget authorization to hire additional agents at a time when Congress is cutting government spending to help reduce the federal budget deficit.

The agency also says strict security policies are in place with the new program.

"It is a sound, balanced program that respects taxpayers' rights and taxpayer privacy," said IRS spokesman Terry Lemons.

The agency chose three companies in March -- CBE Group Inc. in Waterloo, Iowa; Linebarger Goggan Blair & Sampson LLP in Austin, Texas, and Pioneer Credit Recovery Inc. in Arcade, N.Y. -- from 33 bidders. Pioneer Credit is a subsidiary of SLM Corp., commonly known as Sallie Mae. The IRS plans to expand the program to as many as 10 companies in 2008, with a goal of collecting $1.4 billion over 10 years, Lemons said.

The private agencies will get 22 percent to 24 percent of the tax money they collect, although Lemons said he didn't have an estimate for how much they might collect the first year.

Taxpayers in the program first will receive a letter from the IRS that includes the name of the private company that will contact them about the debt. The private firm will then send another letter to begin the collection process.

Critics say that's not good enough. "These companies will be paid based on the money collected, which invites inappropriate and aggressive tactics" that IRS agents had been accused of in the past, Kelly said. She added that consumers filed more complaints with the Federal Trade Commission against the debt collection industry than any other in 2005.

Employees at the three companies chosen for this program are subject to background investigations. Disclosing taxpayer information illegally is a felony, punishable with fines and imprisonment. And contractors cannot use any information gleaned during a tax collection to pursue other unpaid debts.

Tom Penaluna, president and CEO of CBE Group, is surprised by the negative reaction to the program.

"There are a lot of people not paying their taxes who should," Penaluna said. "This is a great start to assist the IRS ... to lower the tax gap."


TOPICS: Business/Economy; Extended News; Government
KEYWORDS: bigbrother; irs; shakedown; taxes; taxesatwork; thepowertodestroy; thepowertotax; youpayforthis

1 posted on 08/23/2006 1:21:33 PM PDT by Graybeard58
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To: Graybeard58

Hopefully these folks will go after the companies that are hiring the illegals too as well as the illegals too. However, I doubt it.


2 posted on 08/23/2006 1:24:53 PM PDT by RSmithOpt (Liberalism: Highway to Hell)
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To: Graybeard58
And contractors cannot use any information gleaned during a tax collection to pursue other unpaid debts

Suuuuuure

3 posted on 08/23/2006 1:25:16 PM PDT by Uncledave
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In my dreams, there's only a consumption tax, no IRS, no requirment for every citizen to be a bookkeeper for the government..

In my dreams anyway.


4 posted on 08/23/2006 1:27:27 PM PDT by D-fendr
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To: D-fendr

Too much profit to be made at all levels, Now these firms get to skim and threaten.


5 posted on 08/23/2006 1:28:14 PM PDT by weegee (Remember "Remember the Maine"? Well in the current war "Remember the Baby Milk Factory")
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To: RSmithOpt

Companies have lawyers so they will not call them. They will be calling people in their homes, offices and churches.

We have 200,000 IRS agents now with billions of dollars spent on computers.

I think this is sad when the last IRS commissioner I saw on tv being interviewed noted we had a 97 to 98% volunteer paying compliance rate already.


6 posted on 08/23/2006 1:30:20 PM PDT by edcoil (Reality doesn't say much - doesn't need too)
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To: D-fendr
Taxes suck, that's all there is to it. I hate the IRS, and the 16th Amendment. I will pay whatever is necessary to keep me out of jail, and not be audited. A consumption tax of 10% (federal) would be nice. That way drug dealers have to pay taxes too.

Right now there is so much illegal income that is not being reported. But that income is used to buy goods and services.

There would have to be an exception for basic food items (like the TX sales tax). The only problem I see comes from my own experience as a long time student. the good thing about the current system is that when you are in school, all you have to pay is sales tax (assuming no taxable income).

It would have been tough dealing with 15-20% sales tax (state and federal combined) while I was in undergraduate and law school. But now that I am an attorney I am OK with it:)

7 posted on 08/23/2006 1:40:08 PM PDT by Clump
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To: Graybeard58

The IRS stinks. I don't mind paying taxes (granted, my taxes are insanely high, because I'm self-employed and even my under-60,000 per year earnings generate 40% in taxes), but I hate it when the IRS attacks.

I have an agreement for some back taxes from a year when one of my clients went under and I had to use my "tax money" savings to live on. I've been paying it regularly, no problem.

I moved a few months ago and they were sending the statement to the wrong address, despite my writing the correct address on the form, so I called them. Big mistake. The guy attacked me, didn't seem to realize that I had an agreement and had been paying it all along (which he had to admit that I had been, when he checked at my insistence), claimed that I hadn't filed or gotten an extension for the last year (I had, and he admitted it when he bothered to check my records), and then told me the IRS was going to be watching me.

I was totally disgusted. I have a very modest income and either pay my taxes that year or pay them later with penalties, but I assume it's easier to watch me than people with bigger incomes. Such as Bill Clinton, who paid less in taxes than I did...even though we probably have about a 1000 to 1 income ratio.


8 posted on 08/23/2006 1:49:59 PM PDT by livius
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To: Graybeard58

Google "tax farming" and "French Revolution" for some interesting historical background.


9 posted on 08/23/2006 2:11:26 PM PDT by Comico Atómico (Which major religion endorses lying to unbelievers?)
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To: Graybeard58

Restoring tax collectors like they were in Roman times?


10 posted on 08/23/2006 3:10:38 PM PDT by A. Pole (It is better to have $5M and live in Weston Massachusetts than to have $20M and to live in Bogota.)
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To: Graybeard58

Could this be the spark that ushers in the end of the IRS?


11 posted on 08/23/2006 3:17:17 PM PDT by thoughtomator (There is no "Islamofascism" - there is only Islam)
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To: A. Pole

how were they in roman times?


12 posted on 08/23/2006 3:19:10 PM PDT by patton (LGOPs = head toward the noise, kill anyone not dressed like you.)
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To: patton
how were they in roman times?

They are described in New Testament. They were buying the right to collect taxes for a flat fee from the government and they kept the difference for themselves. They were feared, despised and hated.

13 posted on 08/23/2006 3:37:44 PM PDT by A. Pole (It is better to have $5M and live in Weston Massachusetts than to have $20M and to live in Bogota.)
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To: A. Pole
feared, despised, and hated...

Gee, glad we live in these modern times. LOL.

The IRS offered me a contract, once, to unscrew their IT systems. I declined. I want their IT systems not to work.

14 posted on 08/23/2006 3:40:18 PM PDT by patton (LGOPs = head toward the noise, kill anyone not dressed like you.)
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To: Graybeard58

Start yelling on this one. Tell your Reps.


15 posted on 08/23/2006 3:49:36 PM PDT by ASH71
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To: weegee

I doubt they will make as much as lawyers do from class action suits.


16 posted on 08/23/2006 4:05:51 PM PDT by Whispering Smith
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To: Graybeard58

Well, since the IRS is a privately held corporation, it kinda makes sense. BTW, the Federal Reserve is also privately held.


17 posted on 08/23/2006 4:14:26 PM PDT by jslade (The beatings well cease when morale improves!)
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