Debt Collectors May Subcontract for IRS

LOS ANGELES – As always, the tax man cometh, but he soon might not be government issue.

Uncle Sam collects roughly $2 trillion in taxes every year, but an additional $220 billion never gets paid. The Treasury Department believes it could collect a good chunk of that money if it went after deadbeat taxpayers more aggressively. The question is: Who should make those calls?

Private debt-collecting firms like Allied Interstate are hoping the government will hire them to do the job they say they can do better than anyone.

"We are going to find them quicker, get them into repayment quicker and ultimately bring in more money to the treasury," said Allied Interstate debt collector Fred Lunquist.

A privatization plan being developed by the Treasury would give private collection agencies either a flat fee or a percentage of the recovered money. But the union representing IRS employees says those federal dollars should go to federal employees.

"The IRS is an agency of the federal government, and it is their job to access and collect the taxes that are due," said Colleen Kelly of the Federal Treasury Employees Union. "If there is money available to hire or pay contractors to do collection work, then the money should be there to provide funding for the IRS."

Critics also worry that taxpayers' privacy would be at serious risk if private firms were given access to financial data. Supporters of the plan insist this could help protect people from false claims...

"The private sector has been subject to fair debt-collection laws far longer than the tax agency has," the National Taxpayers Union's Pete Sepp said. "That means they are actually more likely in some circumstances to watch out for taxpayer rights because they can be taken to court much quicker."

Turning relentless private-collection agencies loose on delinquent taxpayers may not fit with the kinder, gentler IRS Washington was selling a few years ago, but in the end this decision is likely to come down to who can collect the most while charging the least.