Collecting taxes makes system fair

By GARY RIPPENTROP
KNIGHT RIDDER/TRIBUNE
An estimated $250 billion in delinquent tax debt is log-jamming the work of the Internal Revenue Service. Although as much as $120 billion of the debt is potentially collectible, most of the cases go untouched because the IRS lacks sufficient manpower.
The IRS is addressing the problem this year by partnering with private collections agencies to get the job done. Anyone who pays their taxes on time should applaud the move.
Only 25 percent of taxpayers who neglect to file a return get a call or letter from the IRS. This means that approximately 7.4 million people who may owe federal income taxes never hear from the IRS about it. In the long run, if people figure out that there are no consequences to breaking the law, the entire voluntary tax filing system will fall apart.
As it is, those of us who pay our fair share already pay a higher price to make up for the tax delinquents in our midst. How much higher are my taxes because you don't pay? If you consider that the entire budget of the Department of Veterans Affairs in 2005 was $76 billion, or for NASA $16 billion, or for the National Cancer Institute $4.6 billion, you can see how far $120 billion in uncollected taxes could get us.
Because collecting what's owed is a matter of basic taxpayer fairness, Congress authorized the IRS to take advantage of an option that has been enjoyed by government agencies at the local, state and federal level for decades -- partnering with private companies to professionally and efficiently recover past-due tax accounts.
The initiative is good common sense. With the help of the private sector to perform the straightforward tasks of contacting and setting up reasonable installment agreements for taxpayers who acknowledge they owe the amount due, the IRS staff will be freed to apply its expertise toward the more complex cases that clog their books.
Private collectors
Using private companies to help collect government debt is not a new or untested idea. More than 40 states, the District of Columbia, and hundreds of counties and municipalities have been using them with great success. Similar initiatives have worked so well for the Education, Health and Human Services, and Treasury Departments that the IRS will now be allowed the same opportunity.
Let's agree now that there will be some hand wringing about letting private companies collect taxes, and let's agree that legitimate concerns about data privacy and professional conduct can and should be addressed.
Private collections agencies have come a long way, employing well-trained professional staff, relying on state-of-the-art information technology, and adhering to tough consumer protections laws. And, every person working on behalf of the IRS will undergo background checks and special training.
As important as maintaining confidence in our tax collection system is, it shouldn't be sought at the expense of individual privacy and taxpayer rights, which is why private collectors will not receive the full tax returns of people they contact -- only the name, address, phone number, tax year and amount due. Taxpayers working with private companies will retain all the rights established by the Internal Revenue Code, including access to the IRS's Taxpayer Advocate Service. Such rigorous oversight has been built into the program that if a taxpayer objects to working with a private collection agency for any reason, he need only say the word and his case will be sent back to the IRS.
Now, at a time of the year when we are most mindful of the bite Uncle Sam takes from every hard-earned dollar, taxpayers should receive the IRS private collections initiative as welcome news. It is only fair that we all pay our share.
Gary Rippentrop is chief executive officer of ACA International, the Association of Credit and Collection Professionals. Distributed by Knight Ridder/Tribune Information Services.