There are certain subjects that invite debate, while other subjects consume a debate, i.e. Joe DiMaggio vs. Ted Williams, Citizen Kane vs. The Godfather, or even great taste vs. less filling.
Therefore, imagine the emotionally charged salvos that could emanate from a discussion centering on government-run vs. privatized.
Along those lines, and garnering strangely scant attention, was the defeat of a piece of legislation that effectively would have terminated the IRS’s program to collect delinquent taxes via private collectors.
By a margin of 240-179, House lawmakers approved funding for the Internal Revenue Service for fiscal 2008, and in that voting process, killed a proviso that would have placed a $1 million funding cap on the IRS’s private collection service— a figure, according to IRS officials, that would not have been sufficient to sustain the year-old privatized program.
This privatized strategy, as one can imagine, has attracted a great deal of controversy in Washington — often split along party lines.
Proponents point out that the IRS is already short-staffed and does not have adequate personnel to collect the more than $300 billion floating in delinquencies from about 8 million taxpayers.
Meanwhile, opponents claim the program remains largely unsupervised, is prone to harassment tactics and poses security risks to sensitive taxpayer information.
The program was launched as a result of the American Jobs Act of 2004 and allows the IRS to use private collection agencies (currently it has contracts with two but is looking to expand to others) to help garner delinquent federal taxes.
The theory behind it was that it would free up IRS staff to focus on more difficult cases. As part of the program, the PCAs are allowed to keep 25 percent of what they collect — a fact that was certainly not lost on its detractors.
In addition, opponents make the case that the PCA program needed $71 million to get up and running and thus far, its recovery ratio to the dollars spent by the IRS is only 4-1, whereas the IRS ratio is currently in the 13-1 range.
But here’s the rub, and perhaps a reason behind the recent vote.
Congress has never fully funded the collection units of the IRS, according to the service itself. Acting IRS Commissioner Kevin Brown testified that had his agency had its full funding, the need for a private program would have been moot.
You can’t have it both ways. Either pay now, or shut up later.
