The government has been experimenting with contracts for private debt collection in respect of federal tax liabilities. As I reported recently, the National Taxpayer Associate is not in favor of the project, and has spoken out against it quite strongly. The recent report to Congress reviews the reasons that private debt collection is problematic, including now the evidence that privatization of this quintessentially government function has not yielded the substantial revenue benefits promises but rather has had meager success (actually losing money when the costs of setup and maintenance of the program are considered!).
A number of Congresspersons are working to reverse the program legislatively. Several signed a letter, dated January 28, 2008 and available on BNA at this link, to Max Baucus as Chair of the Senate Finance Committee upon the occasion of today's confirmation hearing for Doug Shulman as new Commissioner of the IRS. The letter notes the signers' lack of support for the private debt collection program for reasons including its apparent failure as a cost-effective reveneue collection measure. The signers indicate that this is an issue that they expect to pursue in the hearing.
The hearing took place today. Shulman's prepared testimony, which does not mention the private debt collection program, is available at this link . Also available at the Finance Committee website are the statements of the ranking majority and minority members.