Bill Hangs up on IRS Private Tax Collection

When a program fails not once, but twice, conventional wisdom says you don’t do it again. That’s not the case with the IRS program to use private debt collectors to go after tax debts.

Last month four private collection agencies—paid on a commission basis—started sending letters and making phone calls to hundreds of taxpayers with debts.

Now there is NTEU-supported legislation that would block this IRS program before it does any more harm to taxpayers and the U.S. Treasury.

Rep. John Lewis (D-Ga.) introduced a bill prohibiting the IRS from hiring contractors to collect tax debts. NTEU supports the measure to put the breaks on a program that should not have a third go-around after leading to dozens of complains and illegal activity—by the IRS’s own data.

A pilot program to use private collection agents in 1996 was cancelled after 12 months and a net loss of $17 million. The IRS tried again in 2006 and recorded a net loss of almost $4.5 million.

Along with being costly, the program opens taxpayers to abuse. In one instance, private collectors made 150 calls to the elderly parents of a taxpayer after being notified he was no longer at that address.

Help slam the door on private tax collection. Join NTEU in supporting the Taxpayers Protection Act