The House Ways and Means Committee has passed legislation for the third time that would prohibit the use of contractors to collect on certain delinquent tax accounts.
The controversial program has been operating at a loss, prompting critics such as the National Treasury Employees Union, to argue that in addition to being an inherently governmental function, tax collection could more efficiently be done by increasing IRS staff.
The program lost $50 million in its first year in operation and was supposed to have broken even by this year, but that likely won’t happen until 2010.
Sens. Byron Dorgan, D-N.D., and Patty Murray, D-Wash., recently asked IRS commissioner Douglas Shulman to review the program, writing, "there is compelling evidence that the . . . private tax collector initiative is a dismal failure," and recommended that it be terminated.
"We urge you to focus the resources of the IRS where they can bring in a substantially greater return on investment and properly safeguard taxpayer rights and privacy in the process," the letter concluded.
