Editorial: Outsourcing tax collections

Wednesday, Sept. 6, 2006 | 8:03 a.m.

The Internal Revenue Service has contracted with private collection agencies to track down Americans who owe taxes, despite privacy and fraud concerns raised by Congress, a taxpayer advisory group and a federal employees union.

Starting this week, 12,500 people who owe less than $25,000 in taxes and have not disputed the debts will be receiving phone calls from one of three collection agencies to which the IRS has given taxpayer data, USA Today reports.

The calls could come to an abrupt halt if the Senate, when it reconvenes this week, approves a House budget bill that could prevent funding of the IRS effort. Barring that decision, USA Today reports, the effort is to go forward.

The National Treasury Employees Union, which represents IRS workers, and the Taxpayer Advocacy Panel, an IRS-appointed advisory board, say the plan places sensitive personal data in the hands of the private sector. Although taxpayers are to make payment checks out to the U.S. Treasury Department, critics fear scam artists posing as private tax-collectors could prey on unsuspecting people.

Given the recent problems with personal data theft and losses reported at the Veterans Affairs Department - including the loss of such data through a private contractor - it is unconscionable that the IRS would place taxpayers' most sensitive personal financial data in the hands of private companies.

How do we know that the employees of these companies will not lose, steal or sell the data? How do we know that these companies' computer systems are secure? We don't. That is the problem with this program. The IRS has handed over its core duty to outsiders.

There are certain services that taxpayers should expect in exchange for the money that the federal government deducts from workers' paychecks each week. Among those services should be a reliable, secure and government-operated system of collecting taxes - without giving people's Social Security numbers and other sensitive information to outside companies. Congress needs to immediately put the brakes on this poorly conceived plan.