The House GOP Wants Private Debt Collectors To Take Over IRS Jobs

[GMDino]

http://www.huffingtonpost.com/entry/house-gop-debt-irs_5633c3dde4b00aa54a4e24be?ncid=fcbklnkushpmg00000013&section=politics

Quote:House Republicans are pushing to give private debt collectors the right to target all unpaid tax bills, handing a traditional IRS responsibility over to an industry with a long record of consumer abuse.

Debt collection agencies frequently get into legal trouble for intimidating or misleading borrowers over their debts. The GOP is advocating to empower them with tax debts as part of an effort to pay for highway funding without raising taxes. The idea is that private debt collection companies will be more aggressive with tax delinquents than IRS agents, thus generating more money for the U.S. Treasury.

And private debt collectors probably will in fact be more aggressive than the IRS. But about 79 percent of outstanding tax debt is owed by low-income taxpayers who are essentially too poor to pay, according to Chi Chi Wu, an attorney with the advocacy group the National Consumer Law Center.

"They're going to try to get blood out of a stone, and that's not good for anyone but the debt collectors," Wu told HuffPost.

When the Senate passed its version of the highway bill this summer, it included the measure to privatize tax debt collection. If a similar provision is included in the House bill, it would be almost certain to become law. Rep. John Lewis (D-Ga.) has readied an amendment to strip the measure from the bill, but it is not clear if the Republican majority will even allow a vote on the measure.

Federal highway funding has traditionally been supported by a tax on gasoline, which has been fixed at 18.4 cents per gallon since 1993, despite significant increases in prices at the pump in the decades since. Republicans have resisted calls to modestly increase the gas tax, despite support for such a move from their traditional allies at the U.S. Chamber of Commerce, a lobbying group representing major corporations.

[Vas Deferens]

Folllow the money.

[Benton]

Wow. Just when you think they're out of dumb ideas, they impress you with dumber ones.

[Belsnickel]

Well, with everyone starting to see the faults of the slave labor camps privately run prisons they have to come up with some other ideas.

[JustWinBaby]

Blood out of a stone? So why are we paying IRS agents to pursue uncollectable debts?

And the IRS is SSSSSOOOOOOOOO generous working out payment plans and being flexible - they never toss people in prison or seize assets for tax evasion. Nope. Never.

So while the plan sounds dumb on the surface, getting a few pennies on the dollar for a debt the IRS won't collect anyway AND getting rid of that govt worker (and their benefits and pension)....actually sounds like a pretty good idea.

[Belsnickel]

(11-03-2015, 07:52 PM)JustWinBaby Wrote: Blood out of a stone? So why are we paying IRS agents to pursue uncollectable debts?

And the IRS is SSSSSOOOOOOOOO generous working out payment plans and being flexible - they never toss people in prison or seize assets for tax evasion. Nope. Never.

So while the plan sounds dumb on the surface, getting a few pennies on the dollar for a debt the IRS won't collect anyway AND getting rid of that govt worker (and their benefits and pension)....actually sounds like a pretty good idea.

Actually, in my experience the IRS has been very easy to work with, so long as you are actually willing to work with them. Ignoring them and hoping they go away is what most people who get in bad sorts with them do, and that is never a good option.

[Benton]

(11-03-2015, 07:52 PM)JustWinBaby Wrote: Blood out of a stone?  So why are we paying IRS agents to pursue uncollectable debts?

And the IRS is SSSSSOOOOOOOOO generous working out payment plans and being flexible - they never toss people in prison or seize assets for tax evasion.  Nope.  Never.

So while the plan sounds dumb on the surface, getting a few pennies on the dollar for a debt the IRS won't collect anyway AND getting rid of that govt worker (and their benefits and pension)....actually sounds like a pretty good idea.

Just personal experience, the IRS was always ok to deal with. Both as someone who had paid incorrectly and was supposed to get a refund (did eventually) and as someone who filled incorrectly and has been audited multiple times in the last decade.

[oncemoreuntothejimbreech]

(11-03-2015, 07:52 PM)JustWinBaby Wrote: Blood out of a stone?  So why are we paying IRS agents to pursue uncollectable debts?

And the IRS is SSSSSOOOOOOOOO generous working out payment plans and being flexible - they never toss people in prison or seize assets for tax evasion.  Nope.  Never.

So while the plan sounds dumb on the surface, getting a few pennies on the dollar for a debt the IRS won't collect anyway AND getting rid of that govt worker (and their benefits and pension)....actually sounds like a pretty good idea.

How will a private debt collection agency collect a debt the IRS can't?  How will a private debt collection agency collect debt cheaper than the IRS?  How would this plan reduce the number of IRS employees?   

[Benton]

(11-03-2015, 08:24 PM)oncemoreuntothejimbreech Wrote: How will a private debt collection agency collect a debt the IRS can't?  How will a private debt collection agency collect debt cheaper than the IRS?  How would this plan reduce the number of IRS employees?   

Probably the same way with the prison industry, outsourced labor, etc. Someone makes a large check at the top as his thanks for putting a large check into a lawmaker pocket. Then he hires a bunch of labor at half the rate it makes doing the same work elsewhere.

It's part of the mindset that has our economy stinking and unable to move forward, the leftover trickle down theory. Pay the majority of people less and a few people more, and that will result in all people spending more. Some how.

[oncemoreuntothejimbreech]

(11-03-2015, 08:28 PM)Benton Wrote: Probably the same way with the prison industry, outsourced labor, etc. Someone makes a large check at the top as his thanks for putting a large check into a lawmaker pocket. Then he hires a bunch of labor at half the rate it makes doing the same work elsewhere.

It's part of the mindset that has our economy stinking and unable to move forward, the leftover trickle down theory. Pay the majority of people less and a few people more, and that will result in all people spending more. Some how.

From what I have read there are limited studies comparing private vs. government run prisons. If someone states one is cheaper or more efficient than the other they are doing so without evidence. In my experience, civilian contractors are almost always more expensive than a government employee. 

[Belsnickel]

So I have a little experience with collection of government debt seeing as I work in, essentially, accounts receivable for a government agency. We have a couple of different options when we have a debt go to collections. We have a process we work internally unless we hear nothing from the person. At that point, if the amount due is under a certain dollar value, we write it off as it is more expensive to do anything further. If it the amount is greater than x but less than y we send it so a collections agency. We have two that we work with that specialize in the type of cases we bring. If the dollar value is greater than y then the amount is sent to the Commonwealth's Attorney's office.

The success rate for the agencies is higher because they work the debt more actively/aggressively. It does not cost us much of anything for this service as the fee is charged to the person that owes the debt. Using the CA, they do fairly well getting the funds and we don't pay anything for it, but the only thing done with those cases are a judgement is brought against them. It is a powerful legal tool, but doesn't really do much as far as collections purposes. It does allow the garnishment of wages and such, but even that is such a difficult process to get started it is a very long, drawn out process.

[*michaelsean*]

(11-03-2015, 08:24 PM)oncemoreuntothejimbreech Wrote: How will a private debt collection agency collect a debt the IRS can't?  How will a private debt collection agency collect debt cheaper than the IRS?  How would this plan reduce the number of IRS employees?   

Is it they will go after debts the IRS won't bother with?  Personally  I don't like private businesses running prisons or collecting debt for the government.  We don't need to give private people the power of the government.

[fredtoast]

A privbate debt collector would be more motivated to collect the debt because they would have a profit motive. But I don't know how much more effective they would be or even how much they would cost.

Every state has a government office that provides assistance to parents who need to collect child support. Many years ago I worked for a private company (Maximus) that did this through a contract with the State. The theory was that a private collection firm would be more effective because they have a profit motive, but it turned out to not be that much more effective because a lot of the uncollected chiuld support was owed by people who just could not pay it.

Also remember that the government has a lot more tools that private collectors do not. For example the State could take away a persons drivers license if he was too delinquent in child support payments. sometimes that brought in more money, but sometimes it just made things worse because a person has even a harder time getting a job if he doesn't have a drivers license.

[Belsnickel]

(11-04-2015, 12:54 PM)fredtoast Wrote: Also remember that the government has a lot more tools that private collectors do not. For example the State could take away a persons drivers license if he was too delinquent in child support payments. sometimes that brought in more money, but sometimes it just made things worse because a person has even a harder time getting a job if he doesn't have a drivers license.

This is the biggest thing. Debt collectors don't really have legal authority for much of anything. Their only real tool is credit reporting, and for most people with outstanding debt that isn't going to matter because their credit is shot anyway.

[SteelCitySouth]

This to me sounds awfully close to a private debt collection company in the beginning stages of lobbying for incarceration powers.

[JustWinBaby]

(11-03-2015, 08:24 PM)oncemoreuntothejimbreech Wrote: How would this plan reduce the number of IRS employees?   

Because if you sell the debt or outsource collection you don't need an IRS person trying to collect it.  I would have thought that was obvious.

And it can save money depending on how it's stuctured if what is collected + paid (fees) is less than what you pay an IRS employee to collect.

[oncemoreuntothejimbreech]

(11-04-2015, 03:35 PM)JustWinBaby Wrote: (1) Because if you sell the debt or outsource collection you don't need an IRS person trying to collect it.  I would have thought that was obvious.

And it can save money depending on how it's stuctured if what is collected + paid (fees) is less than what you pay an IRS employee to collect.

(1)  That is an assumption which isn't necessarily true.

(2)  Again, in my experience civilian contractors are more expensive than government employees to do the same job due to greed.

[Belsnickel]

(11-04-2015, 03:49 PM)oncemoreuntothejimbreech Wrote: (2)  Again, in my experience civilian contractors are more expensive than government employees to do the same job due to greed.

For things like contractors doing the jobs of soldiers, this is true. For private v. public sector excluding the military, the public sector has better total compensation in most situations. This is all base don averages, of course. But federal government employees and most state employees are compensated better in total than their private sector counterparts. Salary may be less, but other things make up for it. There are exceptions, like the Commonwealth of Virginia, but it's not the norm.

[Rotobeast]

Once they start using private debt collectors, they can really bug the bejesus out of those pesky Tea Party cats.

[Belsnickel]

(11-04-2015, 04:39 PM)Rotobeast Wrote: Once they start using private debt collectors, they can really bug the bejesus out of those pesky Tea Party cats.

Hey, good point actually. This could free up agents to actually enforce the rest of the IRC. 501©3 statuses at risk left and right. Audits of non-profits of all sorts incoming.