by D. Cupples | Sen. Byron Dorgan called the IRS's debt-collection program a "hood ornament for incompetence." Maybe. Or maybe it was an intentionally wasteful funneling of our tax dollars to private contractors that make healthy donations to politicians. The Washington Post reports:
"The Internal Revenue Service expects to lose more than $37 million by using private debt collectors to pursue tax scofflaws through a program that has outraged consumers and led to charges on Capitol Hill that the agency is wasting money for work that IRS agents could do more effectively."
"Since 2006, the agency has used three companies to go after a $1 billion slice of the nation's unpaid taxes. Despite aggressive collection tactics, the companies have rounded up only $49 million, little more than half of what it has cost the IRS to implement the program. The debt collectors have pocketed commissions of up to 24 percent....
"After years of lobbying by the private collection industry, the Republican-controlled Congress created the program in 2004. The goal was to use collection agencies to close the relatively easy cases the IRS said it did not have the staff to handle: instances in which the taxpayer is not disputing the debt and in which the amount owed is relatively modest. Supporters hoped that the program would eventually be expanded to take over more of the agency's debt-collection duties, and the IRS predicts that the program will break even by 2010.
"Three firms were awarded contracts: Pioneer Credit Recovery, based in the western New York district represented by Rep. Thomas M. Reynolds (R), who supported the program and recently announced his retirement; the CBE Group of Waterloo, Iowa, the home state of Sen. Charles E. Grassley (R), who helped create the program; and Linebarger Goggan Blair and Sampson, a law firm based in Texas, home to President Bush.
"Pioneer Credit employees have given congressional candidates and political action committees $117,450 since 1995, including $16,250 to Reynolds. CBE Group employees have given $9,372 during that period, including $2,500 to Grassley." (Washington Post)
Linebarger Goggan's had been under scrutiny for four years before it won an IRS contract. One partner is in prison for bribery-related offenses, and Chicago officials fired the firm after learning that the firm had paid for a contract officer's vacation.
Some may wonder why Linebarger even got the IRS contract, given its spotty history. Others don't wonder at all, as the firm's employees have major federal government ties -- and some firm employees (and their spouses) reportedly gave $423,260 to federal candidates in both parties since 1995.
This is yet another example of how private-contractors can cost us taxpayers more money, as well as an example of why we need real campaign-finance reform.
Think about that as you scramble to do your taxes today (that is, if you haven't already done them).
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