Highway Trust Fund Bill Would Revive Private Tax Collectors
The union representing Internal Revenue Service employees is denouncing a provision in the pending highway funding bill that would require the Treasury Secretary to contract with private collection agencies as an offset for some of the costs of extending funding for the Highway Trust Fund.
National Treasury Employees Union president Colleen M. Kelley wrote to senators Tuesday, urging them to reject the provision. “The use of PCAs to collect tax debts has repeatedly been shown to be a waste of taxpayer dollars,” she wrote. “The Treasury Secretary currently has the authority, but has chosen not to enter into such contracts.”
The original attempt to privatize tax-debt collection was scrapped a year after the program was launched in mid-1990s, the union pointed out. Taxpayers lost $17 million and some of the companies selected for the pilot projects were found to have violated the Fair Debt Collections Practices Act. The second attempt began in 2006, when proponents estimated the program would collect up to $2.2 billion in unpaid taxes. That effort was stopped three years later, after the program brought in only $4.5 million.
“In addition to being fiscally unsound, allowing PCAs to collect tax debt on a commission basis led to taxpayer abuse,” Kelley wrote. “In one instance, private collectors made 150 calls to the elderly parents of a taxpayer after the collection agency was notified he was no longer at that address.” Read more on Accounting Today.