Should the IRS Use Private Tax Collectors?

The National Treasury Employees Union is urging Congress not to require the Treasury Department to use private collection agencies for collecting taxes, but advocates say the program will benefit the government and the IRS. What is your opinion?

The National Treasury Employees Union (NTEU) said in a recent statement that it is “strongly urging” Congress not to require the Treasury Department to use private collection agencies for collecting taxes.

NTEU president Colleen M. Kelley said, “Using private companies to collect tax debt has been tried before, resulting in millions of dollars lost to the government. It was a bad idea then and it is a bad idea today.”

Kelley was referring to a reference in the NTEU press release which said that between 2006 and 2009, the IRS used private collection firms which resulted in a loss of $4.5 million to the federal government.

NTEU also points to a study done by the Taxpayer Advocate which said that IRS employees collected 62% more taxes than private firms.

Program advocates say the use of private tax collection firms would create more jobs as well as reduce the federal deficit.

Matt House, a spokesman for Senator Charles Schumer (D-NY) said, “The beauty of this program is it would reduce the deficit and bring in more federal dollars while at the same time adding federal jobs. This program would likely add, not subtract, jobs because the work that would be done would be on cold cases that the current work force doesn’t examine and likely will not ever get to.”

Senator Schumer sponsored an amendment that would require the IRS to reinstate the use of the private tax collectors.

A summary of the amendment estimates the program will raise an additional $2.4 billion over 10 years.

Senator Chuck Grassley (R-IA) also adds that the use of private firms will free up more time for IRS employees. He said, “The Treasury union always objects to using any private contractors to collect taxes, yet the IRS career employees consider the debts in question `low yield’ and not worth their time.”

About the Author

Ian Smith is one of the co-founders of He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.