IRS Receives Approval to Hire Private Debt Collectors

The Internal Revenue Service plans to hire private collectors to go after about $13 billion in unpaid taxes, a Republican House aide told Dow Jones Newswires.

House and Senate negotiators on Friday gave the IRS the OK to hire private debt collectors, the aide was reported as saying. A measure that would block the private debt collection project was dropped from a year-end spending bill.

U.S. Rep. Shelley Moore Capito, a Republican from West Virginia, had sponsored the measure, which would stop the Treasury from using any money "to plan, enter into, implement, or provide oversight of contracts" for any private collection practices.

Colleen Kelley, president of the National Treasury Employees Union, supported Capito's provision. She told Dow Jones Newswires that privatizing tax collection would endanger taxpayer privacy.

Kelley said an IRS private debt collection pilot project was such as disaster in 1996 that it was canceled a year later.

IRS Commissioner Mark Everson has said that privacy protections have improved, and giving IRS the authority to hire private contractors will help “ensure all taxpayers pay their fair share.” Private debt collection was approved as part of the "American Jobs Creation Act," a major tax bill President George W. Bush signed last month.

You may like these other stories...

IRS audits less than 1 percent of big partnershipsAccording to an April 17 report from the Government Accountability Office (GAO), the IRS audits fewer than 1 percent of large business partnerships, Stephen Ohlemacher of the...
Legislation coming out of Washington just might reduce homeowners' burden for disaster insurance. It's a topic very much on everyone's minds since the mudslide in Oso, Washington. The loss of human life was...
Divorce is hard, and the IRS isn't going to make it any easier. The IRS generally says "no" to tax deductions that might ease the pain of divorce. In certain circumstances, however, you might be able to salvage...

Upcoming CPE Webinars

Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.
Apr 30
During the second session of a four-part series on Individual Leadership, the focus will be on time management- a critical success factor for effective leadership. Each person has 24 hours of time to spend each day; the key is making wise investments and knowing what investments yield the greatest return.