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.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.


When you download a report, your information may be shared with the underwriters of that document.