August 7th, 2002
by Jonathan Riskind
The Columbus Dispatch
WASHINGTON -- The Internal Revenue Service may hire private collection
agencies to pursue tax debts.
But an Ohio lawmaker fears potential privacy breaches and questions
whether such a move would even give the government a good return on the
taxpayer money spent to contract with private firms.
Rep. Ted Strickland, D-Lucasville, sent a letter yesterday to IRS Commissioner
Charles O. Rossotti raising questions about the initiative. Strickland
wants to know "what steps the agency has taken to ensure the rights and
privacy of American citizens are protected and the cost savings are real,"
according to the letter he co-wrote with Rep. Janice Schakowsky of Illinois,
the top Democrat on the House Committee on Government Reform's government-efficiency
subcommittee.
Strickland's interest in the issue was piqued when his office received
an e-mail last week from the IRS about the possibility of farming out debt-collection
work.
The e-mail was intended to provide lawmakers with information "on how
collectors can prepare to bid on federal contracts." The e-mail added that
"the IRS is working with consultants to try to develop a program, and we
may be ready to hire private collectors next year."
Using private contractors to go after tax debts is an idea that has
been pushed by Rep. Steve Horn, R-Cal., chairman of the government-efficiency
subcommittee.
The federal government is owed $239 billion in tax debts, and about
$100 billion of that is still considered "collectable," said Bonnie Heald,
deputy staff director of Horn's subcommittee. Heald said the IRS doesn't
have the manpower to pursue most of those debts.
Horn says the initiative could protect privacy rights. He has been "strongly
encouraging" the IRS to launch a private collection effort, Heald said.
Although the issue received little attention at the time, an IRS official
told a Senate committee in April that the "use of private collection agencies
is a feasible, cost-effective approach to working certain IRS delinquent
accounts."
IRS official Brady R. Bennett said the IRS has been studying how to
best carry out such a program, but added that "interest in this program
exists in the collection-agency community."
But Strickland said many lawmakers, and their constituents, would like
to know more before the IRS actually undertakes the hiring of private collection
agencies.
Any perception that the IRS is acting in a secretive manner or doing
something that could threaten taxpayer privacy could spark "a real rebellion
among the American taxpayer public," Strickland said.
An IRS spokesman yesterday said only that "we continue to aggressively
study the issue.'
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