Will Tax Debt Collection be Outsourced?

If you’ve been paying attention to financial news lately, you’ve probably heard that the Senate Republications have proposed a controversial new legislation. Frustrated with the IRS and with the fact that reducing its funding doesn’t seem to be getting the desired results, these people are asking to outsource its tax debt collections, one of the IRS’ main sources of survival and primary functions.

The legislation request is included as part of a law to help extend the Highway Trust Fund, and the GOP is requesting that Senate leaders foot the bill for the extension by outsourcing some of the IRS’ collection duties to private collection agencies. The Senate Republicans believe that outsourcing can lead to over $2 billion in savings in a decade.

As is to be expected, not everyone is on board with this idea. The National Treasury Employees Union, for example, believes that outsourcing to private collection agencies would waste taxpayer’s money. Likewise, the Center for Effective Government has been adamant about its belief that it is the government’s job, and the government’s job alone, to collect taxes.

Those who do argue in favor of the new legislation are quick to point out that the IRS has not been very effective at collections. Others are looking for specific people or offices on which to cast blame, with many pointing to IRS managers and Congress itself. Many Democrats believe that the only problem the IRS has is poor funding, and that it needs more funding in order to better pursue collections.

Even those who are not politically affiliated tend to agree with the Democrats, saying that the IRS would do just fine at collections if it had more money and that outsourcing is not necessary. Because the vast majority of people see the potential flaws and threats of outsourcing IRS tax collection efforts, it’s not looking very likely that this will happen…but only time will tell.

Friday, September 25, 2015