WP: Private Firms to Chase Delinquent Taxpayers [View All]

[RamboLiberal]

http://www.washingtonpost.com/ac2/wp-dyn/A35714-2004Dec4?language=printer

When Reps. Shelley Moore Capito (R-W.Va.) and Chris Van Hollen (D-Md.) teamed up in September to get the House to pass an amendment blocking the use of private companies to collect back taxes from delinquent taxpayers, it seemed the Bush administration plan might be doomed for at least a year.

But in the final hours of drafting a 3,300-page spending bill last month, House and Senate negotiators eliminated Capito's and Van Hollen's handiwork, clearing the way for the Internal Revenue Service to hire commercial debt collectors. These private agents could keep as much as 25 percent of the amounts they recovered.

While the Bush administration has strongly supported the initiative as a way to increase revenue collections amid growing deficits, critics contend it could lead to harassment of taxpayers and breaches of privacy. Labor groups representing federal workers also oppose the change. But it has the backing of the debt-collection industry, which has contributed heavily to GOP organizations and causes since Bush became president.

One company that lobbied for the change is California-based Diversified Collection Services Inc., one of eight companies indicted in September by a Texas grand jury, along with three Republican fundraisers for House Majority Leader Tom DeLay (R-Tex.), on charges of alleged money laundering and illegal corporate campaign contributions.

A DeLay spokesman said last week that neither DeLay nor anyone in his office has had any contact with Diversified Collection representatives for several years.