Private tax collectors 1, taxpayers 0

July 3, 2007

Before Capitol Hill cleared out for the July 4th holiday, the House approved an $11 billion IRS budget.

Irs_logo_208
That’s a
4.7 percent increase over last fiscal year’s IRS budget. The money for FY 2008, which begins Oct. 1, includes $3.6 billion for taxpayer service; $7.2 billion for enforcement efforts; $282 million for business systems modernization; and $116 million for tax compliance research.

But the bill is noteworthy for what isn’t in it.

The House removed a provision that would have eliminated funding for the private collection of tax debts.

The outsourcing of tax collection has been a contentious issue for the last several years. Even before the current program began last fall, some lawmakers began working to kill it. The House did in fact approve outright repeal of the program last year, but since the Senate failed to act, the program continued. (You can read the pro-con saga in this collection of blog postings.)

This year, opponents took another approach. They inserted language in the 2008 budget limiting the IRS to no more than $1 million to "renew, extend, administer, implement, enforce, provide
oversight of" private tax-debt collection. That would have effectively killed
the program.

But when it came to a vote on June 28, defenders of the debt collection program used
a procedural move to strip the funding limitation from the bill. Dismantling the collection effort now, they argued, could cost the IRS
$69 million in 2008.

Dollar_signs_3_3
Privately raking in the tax dough:
Enough Representatives also were apparently swayed by the dollars that the IRS says the program will bring in
an estimated $22 million in 2007 and $63 million in 2008. So far, according to the IRS, private collectors have recovered almost $20 million, and the agency’s goal over the next 10 years is more than $2 billion.

Opponents of private tax collection vowed to keep fighting. "There is clearly a consensus in the Congress to end the ongoing abuses in the IRS’ private tax collection program, and that consensus
won’t be thwarted by procedural gimmicks," said Rep. Chris Van Hollen, D-Md. "We are determined to end this kind of bounty-hunting activity once for all."

The appropriations measure also must clear the Senate, which has a private tax-debt collection ally in Senate Finance Committee ranking member Charles Grassley, R-Iowa, who earlier this year wrote his colleagues urging their support of the program.

Ultimately, any funding measure must go to the president for signature. And while the White House supports private tax collection, a spokesman for the president said Dubya might veto the entire bill if it
exceeded his recommended budget amounts, which the House bill does by
$52 million.

Share:

The More Tax Posts tab at the top of this page will take you to, well, more tax posts. You also can search below for a tax topic. 

Latest Posts
6 tax moves to consider this June

June 3, 2026

Definitely take a break this June. But taxes don’t take vacations. So, you also should…

Read More
Tax Season 2026 Continues!

We made it. Tax Day 2025 is finally over. For most of us. When the filing season started on Jan. 26, millions who were expecting refunds filed immediately. Most of us got our returns to the Internal Revenue Service by April 15. But plenty of taxpayers also got extensions. They are looking at an Oct. 15 filing deadline.

Those procrastinating filers aren’t a problem. In fact, the IRS appreciates taxpayers who take time to fill out their 1040 forms correctly. It also is grateful that tax submissions are spread out a bit, especially now that the IRS is a leaner agency. Processing returns is easier when they arrive throughout the year instead of in massive bunches.

But enough about Uncle Sam’s tax collection issues. The focus now is on all y’all who filed for extensions, giving you another six months to complete your return. Since your new mid-October due date will be here before you know it, let’s get started now on meeting it.

The ol’ blog is here to help you finish up your extended Form 1040. You can start with January’s tax tips page, which has links to the rest of the year’s tips by-month collections. You also can peruse various tax categories for more tailored advice by clicking on the More Tax Posts drop-down menu at the top of this (and every) page.

And to make sure you don’t miss your new filing deadline, the count-down clock below will let you know just how much time you to file by Oct. 15. At the latest.e. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • DK WOOD

    Thats about right…Get tough on American taxpayers and let the illegals pay ZERO TAX and forgein investors who open Hotel and convience stores remain exempt from paying income tax or Hotel Tax. Someone HELP, lets get this fixed.
    DK

  • Stillarfish

    I fail to comprehend the purpose of the IRS if private tax collectors are doing the same job!!! Beside collecting taxes what else do they accomplish??? There is a limited to outsourcing government functions and if you take this route then outsource the entire IRS and dismantle the government agency!!!

Comments are closed.