IRS Pushes for Private Debt Collectors

IRS Commissioner Mark W. Everson has been a busy boy on Capitol Hill.

Throughout June, Everson has been wrangling with lawmakers to allow his agency to turn over taxpayer debt to — gulp! — private collections agencies.

And those private collections agencies aren't going to play nice. In fact, they'll have a huge incentive to play hardball — a few billion dollars.

Everson wants to offer private collections agency a cut of up to 25 percent for any of the roughly $13 billion owed to the United States Treasury.

"Using private collection agencies would bring in extra money and help reduce the deficit," Everson said.

It's Everson's belief that private companies, given an incentive, will act more efficiently than government employees. Is he right? Who knows. But his proposal has raised the dander of some on Capitol Hill — Rep. Steven Rothman, D.-N.J., chief among them.

Rothman introduced legislation in the House that would prohibit the IRS from using private collections agencies to secure debts from American taxpayers.

"This [proposal] got everybody screaming, with its audacity, with its wastefulness, with its arrogance, with its inexplicability," Rothman told reporters in a conference call.

Rothman and others worry that U.S. taxpayers could be subjected to some of the private collections agencies' more unscrupulous tactics, such as midnight phone calls.

It's unclear whether lawmakers will allow Everson's IRS to turn the debts over to private companies. But no matter the outcome, it's clear that the IRS has turned its watchful eyes toward enforcement and collections.

That's evident just in the recent news. Among those who have recently felt the sting of the federal government:

• Richard Hatch, the former winner of the CBS reality TV show Survivor, was sentenced to 51 months in prison for tax evasion.

• Ismail Saleem Abuhawwas, 42, a restauraunteur in Virginia, was sentenced to 24 months in prison for failure to pay taxes.

• R. Scot Stokes, a tax-fraud scheme promoter in Henderson, Nev., received 54 months in prison for his actions.