Buried deep in a Senate-passed version of the big highway bill lies a provision to collect unpaid taxes through the use of private debt collectors.
The debt collectors are part of a plan that would raise the money to pay for new highway construction etc. Private tax collection isn’t a new idea. It first surfaced in the 1990s and 2000s where both times it failed by losing money that it was supposed to collect.
Those against the practice claim that it serves to increase the cost of how complaints are handled. It also sets up a scenario where tax payers will be abused the by aggressive tactics that debt collectors often use.
So, why does this private tax collection idea keep surfacing?
For one, it’s an opportunity for four companies who are hoping to win the tax-collection contracts.
Chuck Schumer, a democratic Senator from New York, argued in the past that federal money used to pay private debt collection companies would serve to create jobs. However, it makes better sense now to increase the IRS’s budget because they are more professional in the tax-collection process.
No doubt, highways need to be maintained as an essential function. The controversy arises in the attempt to hire private tax collectors to finance the nation’s highways.
Check out more IRS News stories by clicking that link.
Law Offices of Darrin T. Mish, P.A.: Tax Attorney