The Beginning of the End for Private Tax Collection?

The private tax collection program run by the IRS is in the news again. BNA reported yesterday that Ways and Means Chairman Charles Rangel (D-NY) and Oversight Subcommittee Chairman John Lewis (D-GA) (along with 12 other Ways and Means members) sent a letter to President-elect Obama urging him to end the private tax collection program. The House members quickly lay out the strong rationale for ending the program: The Committee...[argues] that tax collection is an inherent Government function and that professional IRS agents are more efficient at collecting outstanding tax debt. In 2007, the Committee conducted an investigation into the use of private debt collectors and found that their services often subjected taxpayers to undue harassment and confusion not associated with the use of trained IRS agents. The letter is well timed as the current contracts to Pioneer Credit Recovery and the CBE Group, the two contractors handling the tax collection for the IRS, are up for renewal on March 8, 2009. Hopefully the IRS will make the right decision and not renew the contracts. They made a similar decision to abandon other wasteful contracts just this past September, so there is hope.
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