April 22, 2005
IRS: Outsourcing Debt Collection
With a huge backlog of cases and a budget too small to expand its workforce, the IRS is set to begin outsourcing its more simple debt collection cases to outside firms. While a number of governmental agencies, such as libraries, have already begun the practice, the move by the IRS has only been recently approved through the American Jobs Creation Act of 2004. Current estimates of unpaid tax payments hover around $270 billion. The move is not without critics, however, who argue that with private collectors standing to reap up to 25 percent of revenues, harrassment is inevitable. Similarly, there are those who worry about privacy and security issues associated with transferring sensitive financial materials to third-party contractors. FoxNews.com Reports:
"The use of these collection agencies will allow the IRS to focus its resources on more complex cases and will allow the IRS to handle more cases at an earlier stage before they become harder to collect," said IRS spokeswoman Nancy Mathis.
Read More: IRS 'Outsourcing' Debt Collections
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