Leaders of the House Ways and Means Committee wrote to President-elect Barack Obama asking him to end the Internal Revenue Service's private debt collection service.
Ways and Means Chairman Charles Rangel, D-N.Y., and Oversight Subcommittee Chairman John Lewis, D-Ga., along with other Democrats, sent the letter asking Obama to stop the controversial practice of using private contractors to collect debts on behalf of the IRS. National Taxpayer Advocate Nina Olson has also criticized the program for costing more than the IRS's own debt collection efforts. Currently, two companies, Pioneer Credit Recovery and CBE Group, are under contract with the program (see IRS Rehires Private Tax Collectors).
However, the IRS is currently deciding whether to renew the existing contracts for another year. The Ways and Means Committee has made several efforts in recent years to end the private debt collection program, arguing that tax collection is an inherent government function and that professional IRS agents are more efficient at collecting outstanding tax debt. In 2007, the committee conducted an investigation into the use of private debt collectors and found that their services often subjected taxpayers to undue harassment and confusion not associated with the use of trained IRS agents.
"In the 110th Congress, the House passed three bills that would repeal the authority of the IRS to use private collection agencies," wrote the lawmakers. "The collection of federal taxes is an inherent government function. Former IRS officials have testified that the IRS can collect federal taxes cheaper and more efficiently than the private collection agencies."
The lawmakers urged Obama not to renew the existing contracts or expand the program. "In light of the current economic situation, it is important that the administration protect taxpayers by ensuring that they deal with the IRS directly to work through any difficulties," they wrote.
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