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TOPICS
Bush to propose allowing limited private tax collection
President Bush will include a proposal in his fiscal 2005 budget allowing the Internal Revenue Service to use private companies to help beef up tax collection efforts, the Treasury Department announced Tuesday.
The president will seek to increase the IRS budget by 4.8 percent next year, significantly more than the average in the budget for non-defense, non-homeland security discretionary spending. The budget allots $300 million for the IRS to enforce tax laws, and would permit the IRS to use private firms to support collection efforts in "specific, limited ways," according to a Treasury statement.
The use of collection agencies would help garner an added $1.5 billion over 10 years, Treasury officials estimated.
"Many taxpayers are aware of their outstanding tax liabilities but have failed to pay them, and the IRS cannot continuously pursue each taxpayer with an outstanding liability," the Treasury statement said. "The proposal would enable government to reach these taxpayers to obtain payment while allowing the IRS to focus its own enforcement resources on more complex cases and issues."
On Jan. 7, IRS officials announced a massive restructuring plan, with plans to lay off 2,400 tax-processing employees and add more than 2,000 workers in the agency's enforcement operations.
The National Treasury Employees Union has announced plans to fight the restructuring, and has strongly opposed efforts in the past to privatize tax collection efforts.
The Bush administration made a privatization proposal in its fiscal 2004 budget, and a provision on private tax collection was included in President Bush's tax cut bill last year. But a House-Senate conference committee rejected the provision.
In October, the House Ways and Means Committee killed a proposal included in a tax bill that would have permitted private debt collection agencies to collect taxes under certain circumstances. At the time, NTEU President Colleen Kelley called the committee's action "a major victory for taxpayers."
Keith Koffler contributed to this report.
COMMENTS
- As I've mentioned in prior letters to GOVEXEC- this administration just simply doesn't care. Even if Congress said no a hundred times to this proposal, the administration is deaf and will push forward regardless of the consequences. >{? Tax revenue collection is just about the most governmentally inherent function there is-- even in the Middle Ages, the tax collectors worked directly for the King. To give this function to a private collection company and pay them a huge contract fee to do what the government should and must do is just crazy-- but fully in line with an administration interested in privitizing the entire government function regardless of the cost. Well, I hope IRS' plan to give this function to the private sector works better than TSP's plan giving the creation of the TSP computer structure to AMS or TSA's contracting out of their HR functions. Of course that is under the assumption that this administration has any interest in collecting tax revenue at all- if the contract fails, some in this administration would view it as a huge success. GovExec.com reader Posted January 16, 2004 12:24 PM
- Another bad idea back for another round! These idiots don't know their history and don't know their heads from a hot rock. Seems to me there was a test project not too long ago, and surprise! surprise! the confidential information wasn't confidential any more. It takes a definite acculturization (and years of threats) to get people to learn to keep their traps shut, documents covered up, etc. to the extent that federal people have to. (A steady, full-time job with benefits helps, too - I've done my share of part-time/as-needed, etc.) This needs to be publicized so people can fight it. T. Kashar Posted January 14, 2004 6:36 PM
- Of all the...... If there is *anything* in this world that's "inherently governmental" it's the collection of taxes. To lay off 2,400 workers and then hire a contractor (who will get a significant percentage of the take) seems slightly amiss. Here's hoping that wiser heads rule on this and send it back to its source with the message that not only is this stupid, but REALLY stupid. Michelle Zellich Posted January 14, 2004 10:40 AM
