IRS Outsourcing Faces Tough Times

There are increasing chances that the Senate can block the controversial IRS program. The IRS program is intended to outsource the collection of some taxpayer debts. Sen. Byron Dorgan, D-N.D along with 8 democratic co-sponsors introduced legislation that would force the IRS to suspend the pilot project. The pilot project began at September 7. The pilot included the assignment of some 40000 taxpayer files to 3 private debt collectors by December. By the year 2008 they intend to hire 10 companies and collect around $ 1.4 billion in debt from around 350000 cases. There is a commission of 21 cents to 24 cents for every dollar they collect. IRS officials say that they could collect the same at a minimal cost of 3 cents. The outsourcing of such activity has faced severe criticism from the IRS taxpayer advocate. The reasoning they provide is that outsourcing will fail to protect personal data and also lead to the harassment of taxpayers.