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IRS Will Not Renew Contracts With Private Debt Collection Agencies
March 6, 2009
(RTTNews)
The Internal Revenue Service announced Thursday
that, after conducting an extensive review of the private debt collection
program, the agency will not renew its contracts with two private debt
collection agencies that were set to expire Friday.
The decision marks
the end of the program that began in 2006, which was created to allow the IRS to
collect small, undisputed debts that the IRS itself was not equipped enough to
handle by hiring private debt collection agencies.
Congressional
Democrats have been trying to stop the program since its inception, claiming the
program is not effective enough and raising concerns over reports that taxpayers
have been under harassment by private debt collectors.
"After a thorough
review of this program, I have decided not to renew the contracts," said IRS
Commissioner Doug Shulman.
"I believe this work is best done by IRS
employees, and I believe we have strong support from the (Obama) administration
and the Congress for increased IRS enforcement resources going forward."
Shulman further stated that the IRS plans on hiring over 1,000 new collection
personnel in FY 2009.
These new employees would give the IRS the
flexibility to make assignments based on the areas of greatest need rather than
filtering which cases can be worked using contractor resources, Shulman
argued.
He also noted the results of a cost-effectiveness study of the
private debt collection program, which showed that it is reasonable to conclude
that when working similar inventory, IRS collection is more cost effective than
the contractors.
"In these challenging economic times, I have asked all
IRS employees to go the extra mile to help financially distressed taxpayers,"
Shulman said.
"IRS employees have more options available to them to
resolve difficult collection cases."
"By investing in IRS employees to
perform this collection work," Shulman continued, "we can be assured that we
have all the tools available for helping taxpayers confronting complex
situations."
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