The Senate Republican Policy Committee has issued a position paper taking issue with the arguments raised by the National Treasury Employees Union and some in Congress against an IRS program of using private collection agencies to collect owed taxes.
The first phase of the program began in September, as part of the IRS’s efforts to narrow the “tax gap” of overdue taxes–estimated to be $290 billion–in which collection agencies will be allowed to keep as payment a portion of the amounts they are able to collect. However, language in the House version of the pending Transportation-Treasury appropriations bill would end the program, mainly reflecting concerns about potential privacy violations, a belief that the work should be done by in-house IRS workers and a view that a canceled 1996-1997 program proved that such an arrangement is unworkable.
The Senate GOP policy organization, though, said that the IRS is unable to handle its current workload and that the program will be limited to simpler cases that would otherwise slip through the cracks because it would not be cost effective to pursue them. Using contractors will free up IRS agents to concentrate on more important and more valuable cases, it said.
It further argues that it would not be more cost effective to hire more IRS employees and that should the workload decrease in the future, it would be easier to simply not renew contracts than to downsize an in-house workforce. The program further has privacy safeguards built in and the past program was not comparable because it was a fixed-fee arrangement and suffered technological problems that are not an issue today, the paper says, arguing that private collection “should be given a chance.”
