The IRS is hiring debt collectors.
The Internal Revenue Service plans to turn over the names of people who owe $7.7 billion to debt collection agencies starting in June. If the extra heat pays off, the agency gradually will add to the list as it whittles away roughly $50.7 billion in unpaid taxes.
The move will give many Americans one more reason to hate the IRS.
“It’s hard enough making it as it is, and then you’re going to have a government agency hiring collectors to hound people?” said Christina Hess, 24, a catering administrative assistant who doesn’t owe any back taxes. “It just seems like another way to screw us any way they can.”
IRS officials say turning over the names of deadbeat taxpayers to professional collectors is necessary to slow the growing debt of the most recalcitrant taxpayers. Their overdue taxes grew 86 percent to $13 billion between 2000 and 2003.
“We believe that many of these taxpayers have simply chosen not to pay, even though they have the means to do so,” IRS Commissioner Mark Everson said in congressional testimony. “This is unfair to every hard-working taxpayer who has paid his or her fair share.”
Congress voted to allow the IRS to use debt collectors last year as a way to generate more income in light of the ballooning budget deficit.
The agency is reviewing bids and plans to pick between one and three collection agencies by March.
To minimize scams, IRS employees will send letters notifying taxpayers that a debt collector will be contacting them.
A similar plan failed miserably when it was tested about a decade ago, costing the government about $21 million to collect just $3.1 million, according to a Government Accountability Office report.