Editorial: A federal responsibility

Monday, Oct. 15, 2007 | 7:22 a.m.

It's not right for private tax collectors to be set loose on people who are delinquent in paying their federal income taxes.

Collecting taxes is a job for the Internal Revenue Service, which is accountable to Congress for the actions of its agents. It is not clear who, if anybody, supervises private collectors.

Rep. Dennis Cardoza, D-Calif., was right when he said last week that Congress must stop "bounty hunters from harassing American taxpayers."

His remark came as House Democrats succeeded in passing a bill to stop the practice, which was approved three years ago when Republicans controlled the majority of seats in the House and Senate.

Setting aside the issue of the appropriateness of the program, the math clearly does not work.

Used to go after smaller accounts - taxpayers owing usually less than $10,000 - the program last year quickly went through $71 million in start-up costs.

How much more efficient would it have been for the government to simply use that $71 million to hire more IRS agents? The National Treasury Employees Union offered an answer. It said that amount of new agents, over a 10-year period, would collect about $1.4 billion in delinquent taxes.

In a year's time, however, the private agencies have collected just $25 million, according to government records. Of that, the government netted less than $20 million after paying commissions to the private collectors. At that rate, the government would realize less than $200 million over 10 years, as compared to the amount cited by the union.

Yet the Bush administration insists that the private companies will bring in $200 million a year if given a chance. President Bush has threatened to veto any congressional bill ending the program.

We agree with House Majority Leader Steny Hoyer, D-Md., who said, "There is simply no evidence that private tax collectors are more efficient. In fact, the opposite is true."

The Senate should follow the House's lead and vote to kill this program.