Released: May 24, 2007

Tax collection tactics under scrutiny

Source: Kevin McCoy, USA Today

The battle over the IRS’ use of private collection firms to dun delinquent taxpayers escalated Wednesday as a congressional panel debated the companies’ tactics and cost-effectiveness.

The House Ways and Means Committee’s sparring, largely along partisan lines, raised uncertainty about the future of the program the IRS launched in September with the aim of collecting more than $1 billion in unpaid taxes over the next decade.

Two IRS contracting firms, down from the three initially selected, have been making collection calls to thousands of taxpayers who owe less than $25,000 in taxes and have not disputed the debt. The firms, which keep up to 24% of what they recover, have collected nearly $20 million so far, IRS data show.

Highlighting the hearing testimony and exhibits was the recorded voice of an anonymous and clearly exasperated taxpayer who repeatedly rebuffed a private collector’s efforts to verify his Social Security number.

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