The Tax Fairness Coalition, a group of private collection agencies, issued the following statement today in response to the House Appropriations Subcommittee on Financial Services' vote to limit funding for the IRS Private Debt Collection Program:
"Today's vote ... is more political grandstanding by some members of the House Appropriations Subcommittee on Financial Services who are more interested in supporting a narrow special interest than a program that continues to benefit all taxpayers."
On Tuesday, the House subcommittee approved a bill to stop paying private collection agencies to chase delinquent tax debt, yet another challenge for a three-year-old effort that has repeatedly come under fire from Democrats and unions representing IRS employees. The CBE Group of Iowa and New York-based Pioneer Credit Recovery are currently under contract to collect delinquent taxes for the federal agency.
IRS National Taxpayer Advocate Nina Olson told CCR that the use of private collection agencies could cost $81 million more in foregone tax revenue in 2008 than if the IRS staff handled the cases. The advocate's office is an independent entity within the IRS charged with representing the public in disputes with the agency.