The Definition of Insanity: IRS Private Debt Collectors

We have all heard that the definition of insanity is to repeatedly do the same thing expecting different results. Using that definition, the U.S. Congress can now be considered officially insane. Seven years after it proved to be a disaster, the use of outside debt collectors has again been approved by Congress for use by the IRS. You may be asking yourself, “Haven’t we been here before?” Sadly, you would be right.In September of 2006, the IRS decided to use private debt collection agencies to collect on its inventory of past due accounts. I was an opponent of this practice and I was not alone. Our opposition rallied around the fact that the IRS would be handing over personal information to debt collection agencies who were being paid a percentage of what they collected, about 25 percent.

Our concern at the time was that these agencies would use their infamous tactics of collecting debt by intimidation and other methods because the amount that they could potentially receive would be astronomical. At the time, IRS spokesman Terry Lemons responded to our claims saying the new system "is a sound, balanced program that respects taxpayers' rights and taxpayer privacy."

The practice of using private debt collectors was a complete catastrophe and, in 2009, the IRS ended it entirely, and instead beefed up its own collections staff.

In December 2015, the President signed into law the FAST Act. The bill was known as the Highway Bill but embedded inside it was a requirement for the IRS to use private agencies to collect tax debts.