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Politics and Donations Fuel IRS Program.


By Mike Fak(18,246) Mike Fak

Posted Friday, April 18, 2008
View All Blog Posts submitted by Mike Fak


In another incredible bit of pay for play, the IRS is finally getting heat for a tax collection program that actually loses the agency more money then it collects. The hearing, currently being conducted, is shedding light on a program where the IRS turns over small tax debts to private collection agencies for collection. The hearings have shown that the program doesn’t actually help collect late and errant taxes but in fact spends more of our tax dollars than it returns. In fact, the IRS will actually lose $37 million this year but there are politicians who stand by this ridiculous misuse of taxpayer money.

The program was instituted in 2004 by a Republican Congress to help alleviate the burden being placed on IRS employees to work collections of taxes admittedly owed by citizens who were not paying them back. Thus three private firms, all of which give sizable contributions to the senators who backed the proposal were given the books on back tax citizens and told to collect them for the IRS. The problem is they are not only doing a poor job at collecting monies but unlike debt collectors in the real world, who make a percentage of what they collect, these debt collectors are charging for their services even when their services aren’t producing results.

They use the guise of implementation costs but when you think of it, there aren’t really any implementation costs. You are given a bill that someone owes and you try and get them to pay it. Where is the implementation cost in that?

Perhaps the best quote of the year comes from Sen. Byron Dorgan (D-N.D.) who says of the program, “This program is the hood ornament for incompetence.

Another quote that perhaps shows just how feeble minded our legislative leaders are comes from Rep. Jim Ramstead (Minn.) who defended the program by saying, “I hope we don’t take an enormous step backward in our efforts to close the tax gap by eliminating a program that’s working."

Only a politician would think a program that loses $37 million dollars is working. 

What is beyond understanding is that the IRS says they don’t have enough personnel to handle these tax collections in house. I beg to ask how many additional employees could it hire for $37 million dollars to do just that.

Proponents of the system say that the plan could break even by 2010 and that is why it should be allowed to continue. Now there’s a government program we can all get behind. Let’s collect taxes and pay an exact same amount to collect them. That isn’t really breaking even by the way. That is saying we are working for nothing. What we will end up with are private collection firms who gave almost a million dollars to politicians since 2004, actually collecting tax dollars that were supposed to go to the government to provide services. I’m not sure we can get anything more backwards then this. I’m not sure what is worse in our public officials, corruption or stupidity. In this case it appears both are running neck and neck down the track.




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Posted to ProBlogs.com on Friday, April 18, 2008
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