Critics Continue Calls to End IRS Private Debt Collection Program

Democrats and consumer advocates are still lobbying to end the IRS’s private debt collection program, citing privacy and cost concerns at a House Ways and Means Committee hearing yesterday. However, the program has netted roughly $19.5 million in tax revenue in just eight months, and is set to break even by spring of 2008.

And concerns over privacy?  They’ve largely remained simply that: concerns.  The debt collection companies participating in the IRS’s program, CBE Group Inc. and Pioneer Credit, have competently performed their function and have followed guidelines set forth under the Federal Debt Collection Protection Act (FDCPA).  As of April 28, 38,000 cases were placed with the private agencies.  In that time, 25 taxpayers have complained; 22 of those complaints have been dismissed.

The IRS has acknowledged its agents could do the work more efficiently and for less money, but says collecting these debts is not high on its priority list. Instead, the agency puts its resources into tracking down the nation’s biggest income-tax delinquents.

The IRS plans to expand the debt collection program in March with new contract awards expected in October, Brown said, adding that projections are for between $1.5 billion and $2.2 billion in tax revenue collections over 10 years.