Employee of the Day | The IRS Needs Help

Because you, Feed readers, found of Employee of the Week so deliciously fun, we're expanding. We're going to post an Employee of the Day every day of the week. Then, on Friday, you'll vote for the Employee of the Week and that person will be enshrined in our prestigious Hall of Fame. Also, please note: the EOTD need not be an employee of the U.S. government. It's open to everybody.

Here's today's winner: The IRS

"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.

The private debt collection program is expected to bring in $1.4 billion over 10 years, with the collection agencies keeping about $330 million of that, or 22 to 24 cents on the dollar.

By hiring more revenue officers, the I.R.S. could collect more than $9 billion each year and spend only $296 million — or about three cents on the dollar — to do so, Charles O. Rossotti, the computer systems entrepreneur who was commissioner from 1997 to 2002, told Congress four years ago.

I.R.S. officials on Friday characterized those figures as correct, but said that the plan Mr. Rossotti had proposed had been forestalled by Congress, which declined to authorize it to hire more revenue officers.

Critics of the privatization plan point not only to the higher cost but also to what theysay is a greater potential for abuse. With private companies in the mix, they say, debtors could more easily be tricked into paying money to scam artists using spoof Web sites or other schemes, a problem the I.R.S. alerted taxpayers to in April. Brady R. Bennett, collections director for the I.R.S., said that by 2008, about 350,000 past-due tax records will be distributed among about 10 private debt-collection agencies. To guard against fraud, he said, the agencies will contact taxpayers only by telephone or mail — not the Internet — and will instruct them to send all payments directly to the United States Treasury, not the private collection agency.

One of the three companies selected by the I.R.S. is a law firm in Austin, Tex., where a former partner, Juan Peña, admitted in 2002 that he paid bribes to win a collection contract from the city of San Antonio. He went to jail for the crime."

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This entry has 3 comments: (Add your own)

#3 Comment from rogdodger1
8/21/06 10:59 PM | Permalink

Press #1 to Outsource to India, Press #2 to Speak Spanish, Press #3 to forget to File this Year, Press #4 to Forget to support the War, Press #5 to boycott Big Oil, Press #6 to skip the Elections, (what's the use??)
#2 Comment from zz6570
8/21/06 10:23 PM | Permalink

This outsourcing must have been dreamed up by the same people who created the endless loop phone system @ IRS. I wonder if the collection agents will speak english as their principal language.
#1 Comment from shankjr6
8/21/06 10:03 PM | Permalink

Only our Congress, in it's infinite wisdom, could come up with a scheme to "outsource" IRS back taxes---at a huge cost to the taxpayers. Just one more example of MASSIVE INCOMPETENCE on a scale heretofore unknown in recorded human history. We need to fire all of them, and start over!

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Employee of the Day | The IRS Needs Help