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Opponents of the Internal Revenue Service's controversial pilot program to outsource collection of some tax debts will continue their resistance, despite a defeat Thursday in the House.

Supporters of the pilot program used a procedural move last week to remove language from the fiscal 2008 financial services appropriations bill that would have limited the program's funding to $1 million. The language, added by Rep. Jose Serrano, D-N.Y., would have shut down the program in all but name, since the IRS has estimated the cost of continuing it will be $7 million in 2008.

But lawmakers and union representatives who argue that the program puts taxpayer information at unnecessary risk say they have not given up.

The House Ways and Means Committee plans to consider stand-alone legislation to revoke the IRS' authority to contract out tax debt collection, a spokeswoman for Rep. Chris Van Hollen, D-Md., said. Van Hollen, who introduced the bill (H.R. 695) in January, supports hiring more IRS agents instead of outsourcing, the spokeswoman said.

The National Treasury Employees Union, which represents many IRS workers, has consistently opposed the program, and says it will support Van Hollen's bill and a Senate counterpart (S. 335).

"We are urging a swift markup of this legislation," a spokeswoman for NTEU President Colleen Kelley said. "There is support in Congress to end this program."

The Tax Fairness Coalition, a trade group that represents private debt collectors, hailed the House move as a victory.

"It's interesting that when they put in the $1 million to limit the program, they didn't put in anything to offset the cost of cutting the program," said Dan Drummond, a spokesman for the coalition.

The program had raised nearly $20 million as of April, and is projected to bring in between $60 million and $80 million in fiscal 2008. The IRS plans to expand the current pilot project into a full-scale program in 2008, a transition that will involve extending contracts to at least three more firms. Right now, the IRS has contracts with two private debt collection firms.

COMMENTS

• Why don’t we just contract out the entire federal government…it appears as though this is the direction we’re headed. I cannot fathom why anyone would think contractors possess the skills, abilities and characteristics surpassing in excellence Government workers…although we can thank President Bush for this egregious state of mind attributed to his intense abhorrence of federal workers. However, the federal workforce has performed in an exemplary manner…many of whom deploy and give 110%, can the President say the same…he who is looking at a 33% approval rating. Since there are an inordinate number of contractors presently in the workforce, many of whom require an attitude adjustment, lacking performance, and questionable ethics, is it any wonder we don’t want, need or desire their ilk on board, particularly when dealing with the tax debt. It would behoove the Government and be less cost prohibitive hiring agents within the IRS to collect taxes as opposed to contractors. Finally, it would shield taxpayers having the IRS perform a primary function for which the agency was established. I doubt our founding fathers and upholders of freedom envisioned private companies legitimately fulfilling functions of the Government. CAE Posted January 11, 2008 8:54 AM
• Stop selling off our country! The federal civil service system was constructed to at least reduce political cronyism and favoritism. Private industry is NOT superior to trained professional federal workers. Why should we have to pay civil service workers & contract companies to do the same job? Is that efficient? Wake Up America, we're still losing! US Customs Senior Inspector (Retired) Posted July 4, 2007 5:36 PM
• I read where we pay a private contractor 27 cents on each dollar collected as compared to hiring more IRS agents costing 3 cents on each dollar collected. Sounds like a poor business model to me! DB Clarke Posted July 3, 2007 10:59 AM