Private tax collection Feed

A highway funding bill is finally moving through Congress. It was stalled for months following the Senate's approval this summer of a transportation bill, but yesterday (Nov. 5) the House approved its highway measure. The two bills must be reconciled by a conference committee. But at least there's some time to smooth out policy potholes. The Highway Trust Fund has money, thanks the latest in a series of short term funding measures, through Nov. 20. One fiscal provision, however, won't have to be hammered out. Both the House and Senate versions of the bill require that the Internal Revenue Service... Read more →

Look out. Some hitchhiking private tax debt collectors could stall the Highway Trust Fund, which already is running on fumes. Claudette Colbert shows Clark Gable how to catch a ride in the classic film It Happened One Night. Their characters were much more welcome hitchhikers than are private collectors of tax debt who are hitching a ride on the Senate bill to pay for the Highway Trust Fund by July 31. Photo/movie trailer screenshot courtesy Wikipedia. The Senate late Wednesday, July 22, finally restarted its transportation funding effort thanks to a 62-36 vote that will let debate on the actual... Read more →

Have you ever owed the Internal Revenue Service money that you just couldn't pay? What about other overdue bills? If you're behind on private sector payments, chances are you'll eventually hear from a debt collector. Now the Senate Finance Committee, via a provision in its tax extenders bill approved on April 3, wants to once again sic private bill collectors on delinquent taxpayers. Near the end of S. 2260, the Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act -- that's the catchy, acronym-friendly name Senate Finance Committee Chairman Sen. Ron Wyden (D-Oregon) gave his extenders bill -- is Sec. 304.... Read more →

When the IRS ended its controversial private tax debt collection program in 2009, Commissioner Douglas Shulman echoed the belief of consumer advocates and many members of Congress that such a job was more properly suited to federal employees, not hired hands. "I believe this work is best done by IRS employees, and I believe we have strong support from the Administration and the Congress for increased IRS enforcement resources going forward," said Shulman back then. Apparently the commish was misinformed. A statistical sample of the previous private tax debt collection cases by the Treasury Inspector General for Tax Administration (TIGTA)... Read more →

Private tax debt collectors are back in the news. But this time it's because of local government, not IRS, involvement. "Homeowners on Shaky Footing Could Lose it All Over Taxes," announces the New York Times today on the front page of its national edition. Cash-strapped counties and cities, reports the Times, are selling delinquent tax bills to private firms. It sounds like a good deal. The local governments get a quick infusion of cash and don't have to be bothered with (or paying for) collection efforts. Investors in the tax collection efforts get a risky, but potentially high return, way... Read more →

The controversial private tax debt collection program ends today. But its demise didn't come from Capitol Hill lawmakers, many of whom have, since the program's inception, opposed the outsourcing of some unpaid tax bills to private debt collection agencies. Not that they weren't still trying. The most recent effort was via the comprehensive federal funding bill now awaiting approval and which includes a provision to end the program. Rather the decision came from the IRS. IRS Commissioner Doug Shulman announced yesterday afternoon that he would not renew collection agency contracts. The collection work had been conducted by CBE Group Inc.... Read more →

Another effort to ax private tax collectors

Everybody's got their noses deep in Obama's first budget proposal, which I previewed yesterday, and I plan to look at the specifics released today, too. First though, I have to clear some stuff off my never-ending Do Now list. One of the things on that list is a reminder to examine current Congressional funding measures. Yeah, I know, you wish you lived my exciting life. But, hey, money makes the world, including all our federal agencies and programs, go round. And included in the Omnibus Appropriations Act of 2009 (H.R. 1105) that was passed yesterday by the House is a... Read more →

The 'softer' side of IRS collections

Remember the kinder, gentler IRS? That tax collector persona appeared following the agency's 1998 reorganization that was mandated by Congress following public outrage over collection tactics. As the deficit has grown, and Congress can seem to make itself pay for projects, the IRS has been given more leeway to get tough again. Capitol Hill has instructed the agency to find ways to close the tax gap, the billions of dollars the IRS says it is owed but that hasn't been paid. To this end, private debt collectors have been hired. The IRS also has ramped up audits. But it looks... Read more →

Taxpayer Bill of Rights approved ... again

Congress' annual political show of support for taxpayers continued yesterday. Every April 15, lawmakers look to highlight the concerns of John and Jane Public. It's not that I necessarily doubt their sincerity; I'm sure that some in Washington really do want to improve the system and process for us all when it comes to paying for our government's operations. But I just wish rather than using the tax-filing deadline as a publicity tool, legislators would work on tax issues year round and come up with some changes that actually get implemented. Take yesterday's latest version of a taxpayer bill of... Read more →

Private tax debt collection axed by House

Unfortunately for opponents of outsourced tax collection, the House action isn't a fatal blow. In fact, the passage yesterday of H.R. 3056, the Tax Collection Responsibility Bill of 2007, serves only as an annoyance, not a serious threat, to the efforts of private bill collectors hired by the IRS. "No" to private collectors: Supporters of the bill, mostly Democrats, say that private collection agencies (PCAs) are not nearly as efficient as IRS employees. House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., said data shows IRS employees collect unpaid taxes at a much faster pace than PCAs, whom he... Read more →

House to IRS: Do your job!

The House Ways and Means Committee has thrown the latest punch in the continuing battle over IRS use of private tax debt collectors. It's a solid hit, but far from a knock-out blow. Ways and Means, the Congressional panel responsible for originating federal tax legislation, has approved HR. 3056, The Tax Collection Responsibility Act of 2007. In keeping with its name, Representatives, at least a majority on the tax-writing panel, are demanding that the IRS resume full responsibility for bringing in federal tax money. The bill cuts right to the chase. From the Committee's description of the measure: "The proposal... Read more →

The private tax collection party is over ... maybe

Private debt collectors who, since last September have been bringing in delinquent taxes under IRS contract, were celebrating a couple of weeks ago. The party hats were donned and high fives struck after the House approved -- well, technically, it didn't disapprove -- funds for the continued hiring of private collection agents, known as PCAs in IRS parlance. But over on the Senate side of Capitol Hill, the PCA roller coaster is definitely heading down. Yesterday, the Financial Services and General Government Subcommittee of the Senate Appropriations Committee signed off on an $11.1 billion fiscal 2008 IRS budget. However, that... Read more →

Private tax collectors 1, taxpayers 0

Before Capitol Hill cleared out for the July 4th holiday, the House approved an $11 billion IRS budget. That's a 4.7 percent increase over last fiscal year's IRS budget. The money for FY 2008, which begins Oct. 1, includes $3.6 billion for taxpayer service; $7.2 billion for enforcement efforts; $282 million for business systems modernization; and $116 million for tax compliance research. But the bill is noteworthy for what isn't in it. The House removed a provision that would have eliminated funding for the private collection of tax debts. The outsourcing of tax collection has been a contentious issue for... Read more →

Oversight OK of tax debt collectors

The IRS Oversight Board, a panel created in 1998 by the IRS Reform and Restructuring Act, has given its OK to private tax debt collectors. The nine-member independent Board met earlier this month to examine the controversial program's progress. Since last September, the IRS has been using debt collection firms to bring in certain unpaid taxes. So far, the IRS has turned 33,824 cases over to the private collection agents (PCAs), accounting for unpaid taxes of $218 million. As of last month, according to the Oversight Board, the collection agents had brought in $19.47 million in gross revenue. $15.57 million... Read more →

Grassley gung-ho on private tax debt collectors

The controversy over use of private debt collectors to bring in some unpaid taxes has been percolating on Capitol Hill almost since the IRS hired the firms. The proposal survived an early regulatory roadblock, as well as legislative efforts to kill it last Congress and again in the new 110th session. Even the loss of one of the program's original collection companies (the Austin firm and the IRS mutually agreed to end their deal back in February) didn't stop the effort. Now, the former head of the Senate Finance Committee is trying to ensure that it continues unimpeded. Charles Grassley,... Read more →

We like bill collectors better

First, let me say the "we" in the headline is just the general pronoun; the "royal we," if you will. Neither I nor anyone I know likes bill collectors better than anyone or anything else. But IRS Commissioner Mark Everson told a Congressional panel on Tuesday that some IRS customers, aka taxpayers, do feel that way. Specifically, the commish told the House Ways and Means Subcommittee on Oversight that studies indicate when it comes to bringing in unpaid tax bills, customer satisfaction with the efficiency of the private collection agencies is ranked as "good" when compared to satisfaction with collection... Read more →

Taxpayer Advocate's call to action

Get private tax-debt collectors off the streets and out of taxpayers' hair. Repeal the alternative minimum tax provisions. Eliminate or at least simplify income phase-out rules that apply to numerous tax breaks. Improve services and tax laws that affect military personnel. Do the same for spouses facing tax problems because of a partner's or ex's actions. Those are just a few of the recommendations Taxpayer Advocate Nina Olson has for the IRS and lawmakers in her annual report to Congress. I'm tied up this morning on other projects, but later today I'll look at and comment on these and other... Read more →

I don't remember checking that "opt in" box

The IRS has decided it's time to make a few extra bucks using our personal data. The tax agency has announced that tax year 2002 and 2004 filing statistics, sorted by Zip Codes, are now for sale. You can pay $25 for a single state or $500 for info on taxpayers across the entire country. You'll be able to see, among other things, how many total returns, by income range, were filed where you live, how much in taxes was collected from you and your neighbors, how much was from self-employment income reported on Schedule C, how many of your... Read more →

Time your tax evasion

If you've stiffed the IRS, you picked a good year to do so. An election year, in fact, might give you a bit of cover. That seems to be the message from the IRS. A story in today's New York Times says that earlier this month, IRS Commissioner Mark Everson (at right) ordered his agency to postpone collection of back taxes from Hurricane Katrina victims until after the Nov. 7 elections and the holiday season. The reason: To avoid negative publicity. Good luck with that, Mr. E. Everson told Times' reporter David Cay Johnson that putting off collections until after... Read more →

Tax thoughts from the Devil's Advocate

Officially, the tax thoughts come from the Internal Revenue Service's Taxpayer Advocate, Nina Olson. But in that role, as champion of individual filers like you and me, Olson regularly goes toe-to-toe with the federal agency that bedevils most of us at some point. In a recent interview with the Tax Foundation, Olson offered her opinions, which in some cases are quite different from the official IRS position, on the complexity of the tax code, the tax gap and the agency's hiring of private firms to collect delinquent taxes. It's that last issue that caught my eye, since I just posted... Read more →