Washington, DC — Today, Ways & Means Ranking Member Dave Camp (R-MI) and Oversight Subcommittee Ranking Member Charles Boustany (R-LA) issued the following statement on the IRS’ decision to end the use of private debt collection agencies in tracking down acknowledged tax debt that has not been paid.

“Cutting programs that don’t work makes sense, but this program does work,” Camp said.  “We should not attempt to fix what isn’t broken.  Utilizing private contractors allowed us to successfully track down thousands of people who admittedly owed tens of millions of dollars in unpaid taxes. Ending the program is a mistake.”

Boustany added, “The notion that the IRS would walk away from a program that is proven to collect delinquent taxes is an insult to people actually playing by the rules and paying their taxes.  When one group doesn’t pay, the rest of us are left footing the bill for critical government services.  The IRS should reverse this decision.”

FACT:  As of September 2008, IRS’s work with private collection agencies (PCA) has collected about $70    million in taxes that otherwise would have gone unremitted.  The IRS has already retained more than $13 million in new funds for collection activities as a result of the PCA program.

FACT: The Joint Committee on Taxation has estimated that terminating this program would cost the Federal government $578 million in lost revenues over the next decade.

FACT: PCAs have been used by the Federal government since 1982.  The Departments of Education, Health and Human Services, and Treasury all use PCAs to collect outstanding debt. (IRS Comments, National Taxpayer Advocate 2006 Annual Report to Congress, p. 57)

FACT: According to the Association of Credit and Collection Professionals, of the 43 states with a personal income tax, 34 use private agencies to help collect from delinquent taxpayers.