Privatizing the IRS

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Tax Collection by Bounty Hunters

“When there is an income tax the just man will pay more and the unjust less on the same amount of income.”
– Plato, The Republic

There is nothing government does that the private sector can’t do better, according to George W. Bush, the president who will go down in history as the one who proved that government doesn’t work.

At first it was just social security and it would be hard to find a financial firm that is not eagerly awaiting its privatization and the billions of dollars that will soon flow into the stock market-their journey interrupted only ever so briefly by the pockets of the financial firms through which they must flow-firms that have generously contributed to Bush’s election, according to Boulder, Colorado lawyer Christopher Brauchli.

The commissions will flow as soon as the program is implemented and unlike the poor, whose treasure will be given them in heaven, the financial institutions and employees will receive their treasure as soon as the legislation is passed, thanks to H.R. 2896 known as The American Jobs Creation Act.

The IRS’ greatest area of expertise, as all taxpayers know, lies in printing long complicated forms that taxpayers have to complete. Two of the things with which the Internal Revenue Service has always had difficulty is applying the forms to real life situations and when the forms are filed, collecting the money supposed to be generated by the completed forms. Its difficulty with interpreting the forms explains why every year at tax time a creative taxpayer will invent a question to ask the Internal Revenue Service and will call the IRS 20 or 30 times and repeat the question to each IRS agent who answers the phone.

The enterprising taxpayer will then let it be known that he or she got as many answers as he or she made calls. Invariably (and undoubtedly in an attempt to embarrass the IRS) the question is always framed so that depending on the answer, the taxpayer is entitled to a humongous refund or owes a humongous amount of money. Either way, the IRS is held up to public ridicule which is just about the last thing it needs during tax season.

Whereas the neither Jobs Creation Act nor anything else Congress could conjure up would help the IRS answer questions correctly or consistently when asked about filling out the forms it has invented, Congress has decided it can do something about the fact that the IRS is unable to collect the taxes the taxpayers owe. And the solution is every bit as creative as the social security reform to which we all look forward. It is privatization.

The overlooked section says the IRS may outsource debt collection to private debt collectors.

According to the Joint Committee on Taxation, outsourcing IRS collection procedures will generate about $1.4 billion between 2006-2014, money that, apparently, would not otherwise have been collected by the IRS. Everyone knows that the IRS does not normally get to keep what it collects. Were it otherwise the IRS would be the biggest agency in the federal government and there would be no others.

This bill turns that idea on its head. The IRS will be permitted to keep and spend 25% of what the private collection agencies (PCA) collect. Although not clear from what I’ve read, presumably the 25% it gets to spend it would give to the PCAs who collected the money. Thus, if the PCAs collect $1.4 billion, they will get to keep $3.5 million for their efforts.

The PCAs will be very excited about the prospect of this new program. It’s not as exciting as being a stock broker and investing people’s retirement monies but, on the other hand, debt collectors are not in the same silk stocking league as stock brokers and should be grateful for whatever crumbs the Bush administration sends their way. It’s a lot better than the kick in the pants the IRS debtors will certainly receive from the PCAs.

Counter Punch: Privatizing the IRS

According to the Rev. Jack Zylman in Birmingham, the IRS announcement that it plans to privatize the collection of back taxes will be a disaster.

New York City has experience in private companies attempting to do public service, he said. Some years ago, New York City had private fire departments. These fire department competed to put out fires. When the alarm rang, several dashed to the fire, and, before they fought the fire, they fought each other.Yes, since only one would be paid, the firemen had a rumble in the street, a fist-fight.

Then, if the building hadn’t already burned down, the winners put out what was left and were paid. New York wisely converted to a public fire department.

Will we see tax collectors fighting in Wall Street? Pocketing payoffs and bribes? Working with organized crime? All we need now is privatized elections – uh, did anyone say “Touch Screen Voting?”

© 2006 – 2016, Glynn Wilson. All rights reserved.

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