Wednesday, September 6, 2006

CONTACT: Barry E. Piatt
or  Brenden Timpe
PHONE: 202-224-2551

(WASHINGTON, D.C.) --- U.S. Senator Byron Dorgan (D-ND) called Wednesday for the Internal Revenue Service (IRS) to put the brakes on its plan to begin contracting out to private debt collectors the effort to collect unpaid federal taxes.

“Everybody needs to pay the taxes they owe,” Dorgan said, “but if they don’t, it ought to be professional Internal Revenue Service employees, not private debt collectors, who go after them,” Dorgan said. “Contracting out tax collections is a really bad idea.”

The IRS’s own analysis of the plan even acknowledges as much, noting that as planned, the IRS will “pay more to collect unpaid taxes but collect less than if it used its own professional staff in that effort,” Dorgan said.

In a letter to IRS Commissioner Mark W. Everson, Wednesday, Dorgan said he will introduce legislation in the Senate to block the IRS from using private debt collectors and that similar legislation has already been approved by the U.S. House. “It makes no sense to go forward with a plan that falls on its own merits, and especially when there is significant opinion in the U.S. Congress that this is not the route to go, and previous experience shows it won’t work,” Dorgan said.

A similar effort to contract with private debt collectors “failed miserably” in 1996 Dorgan noted. “Confidential taxpayer information was compromised and there were frequent instances of abusive collection practices,” said.

That effort was shut down a year earlier than the IRS had planned.

“This is just another example of the ideology of this Administration at work,” Dorgan said. “They want to contract out everything, from IRS collections to air traffic controllers, to prisoner of war interrogators. It doesn’t make sense.”

Dorgan noted the irony of the fact that the Bush Administration plan will increase collection costs but reduce the amount collected. “This doesn’t make common sense to me.”

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