My initial thoughts on this article are that I don't like what it means for the unabated growth of the federal government. I don't like the fact that the article support's the IRS's job of tax enforcement, nor do I like the conservatives idea of outsourcing tax collection to collection agencies, i.e., using our tax dollars to enrich collection agencies, thereby extending federal control to that industry/business.
Here are the two articles in question:
The I.R.S. admits that external collection is far more expensive than internal collection. Johnston cites current I.R.S. commissioner Mark Everson as saying so, as well as former commissioner Charles O. Rossotti, who told Congress that if the I.R.S. hired more agents, it “could collect more than $9 billion each year and spend only $296 million—or about three cents on the dollar—to do so,” according to Johnston.
Even if Rossotti was exaggerating by a factor of 5, the U.S. Govt. would still be getting a better deal by hiring more agents than by contracting to a third party that takes a 22% cut. But Congress, which oversees the I.R.S. budget, is famously reluctant to give the agency more resources to do its job. We touched on this subject in a column we wrote a few months back.
Here's one article the author is quoting from the NY Times writer David Cay Johnston:
Within two weeks, the I.R.S. will turn over data on 12,500 taxpayers — each of whom owes $25,000 or less in back taxes — to three collection agencies. Larger debtors will continue to be pursued by I.R.S. officers.
The move, an initiative of the Bush administration, represents the first step in a broader plan to outsource the collection of smaller tax debts to private companies over time. Although I.R.S. officials acknowledge that this will be much more expensive than doing it internally, they say that Congress has forced their hand by refusing to let them hire more revenue officers, who could pull in a lot of easy-to-collect money