IRS issues contracts to private companies for collecting back taxes

RS issues contracts to private companies for collecting back taxes
WASHINGTON (CNN) -- The Internal Revenue Service on Thursday awarded
contracts to three private companies for collection of back taxes, an
action
that resulted in outrage from a union representing tens of thousands of the
IRS' own employees, which maintains taxpayer information should not be
given
out to contractors.
The three firms awarded the contracts by the IRS are The CBE Group of
Waterloo, Iowa; Linebarger Goggan Blair & Sampson LLP of Austin, Texas; and
Pioneer Credit Recovery Inc. of Arcade, N.Y., the agency said in a written
statement. A total of 33 firms bid for the contracts, it said.
The leader of the National Treasury Employees Union, which represents
90,000 IRS employees, called it "a sad day for America's taxpayers."
"American taxpayers can no longer have the confidence that federal
tax
collections are not based on personal gain," President Colleen M. Kelley
said
in a written statement.
Kelley noted the private companies will pursue tax debts in
exchange for
a bounty of up to 25 percent based on the money they collect. The IRS, she
said, plans to award as many as 10 such contracts later this year.
"Americans believe certain governmental functions should not be
farmed
out to for-profit companies , and this is clearly one," she said.
IRS Commissioner Mark W. Everson said in the agency's statement
that the
vast majority of states use private firms to collect delinquent taxes.
"We have carefully considered all of the concerns expressed about
this
project," he said. "As a result, we are putting tough safeguards in
place to
protect taxpayer rights and privacy."
The firms will be "subject to the same stringent taxpayer
protection and
privacy rules that IRS employees work under," the IRS statement said.
Background checks will be conducted on all private-firm personnel
associated
with the project and employees must undergo an IRS-directed training
program.
The firms cannot subcontract the work, the IRS said, and are not
authorized to take enforcement actions such as liens, levies or seizures or
work on technical issues such as offers in compromise, bankruptcies,
hardship
issues or litigation. The cases assigned to the private firms will be
ones in
which the taxpayer has not disputed the liability.
Kelley and the NTEU, however, said the safeguards are inadequate to
protect taxpayers' privacy, saying the program will spread Social Security
numbers and other private information.
In addition, she charged the IRS has failed to inform the public
about
the program. "By the time most people find out about what's happening,
it will
be too late."