Released: November 01, 2006

GAO urges closer oversight of private tax collectors

Source: By Jim Abrams, Associated Press (Free Registration)

The Internal Revenue Service must improve oversight of a new program that uses private agencies to collect back taxes before it expands the effort, congressional investigators say.

A Government Accountability Office report commended the IRS for addressing some important factors for the success of the program, such as proper training of collection-agency employees, ensuring that taxpayers are treated properly and that taxpayer information is secure.

But it said the agency has not completed critical work on setting goals and determining costs.

The IRS lacks criteria to assess “whether the program performance warrants expanding the number of private collection agencies and turning over more cases to them,” the report says.

Critics of the program said yesterday that the GAO report supported arguments that the tax agency was moving quickly to incorporate an unworkable program.

“I’ve been concerned all along about the use of private contractors to collect federal taxes,” said Sen. Max Baucus of Montana, the ranking Democrat on the Senate Finance Committee. Baucus and committee chairman Charles E. Grassley (R-Iowa) requested the GAO study.

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