The House has approved legislation that would end the extremely unpopular program that allows private collection agencies to collect tax debts for the IRS. The IRS had previously argued that the policy was not financially viable.

Of the $32 million brought in since the collection bill went into effect, the IRS collected $7 million on its own. The collection agencies received almost 25% of the total. That leaves a net collections by the agencies of less than $20 million, which pales in comparison to the $71 million in start up costs. Further, it has been estimated that spending that $71 million on more agents would have resulted in $1.4 billion in revenue.

Senate Republicans claim that the bill won’t pass. However, if it does, the White House threatened a veto by President Bush. Hmm, anyone else find that interesting considering that one of the three collection agencies is a Texas law firm?

Last Updated on


Kelly Erb is a tax attorney and tax writer.

Write A Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.