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Tuesday, April 04, 2006
Outsourcing of IRS Creates Private Company Infighting
Following up on a previous posting from last week, an article that ran yesterday in govexec.com reported that two private collection companies have filed a complaint with the General Accountability Office (GAO) protesting the selection of a third firm (Linebarger Goggan Blair & Sampson) to receive a contract to collect outstanding taxes owed to the IRS.
Apparently a former partner with Linegarger Goggan Blair & Sampson pleaded guilty in 2004 of bribing San Antonio City Councilmembers in return for contracts to collect overdue city fees. The good folks at Diversified Collection Services of Livermore, CA and GC Services of Houston, TX think the IRS should have taken that into more consideration than they did in awarding contracts (read: you should have picked us). Those two groups were not selected for contracts by the IRS, but have said their protest seeks merely to understand the selection process and how it was implemented.
I'm sure the fact that the companies selected for contracts would be able to keep up to 25 percent of the taxes they collected has nothing to do with their disappointment in losing out on the contracts and this simply is a quest for the truth! (hmph!)
This isn't chump change we're talking about either. The IRS has admitted hiring private firms to collect the taxes costs significantly more for the government than simply hiring more staff at the IRS to collect the revenue themselves. As Rep. Steve Rothman angrily pointed out during an appropriations hearing last week, ""The IRS wastes up to 25% on commissions to private collection agencies rather than save more than $30 million [each year] by hiring federal employees to do the work instead."
It's amazing lengths private companies are willing to go to in order to drag skeletons out of the closet when $30 million is put up for grabs. This outsourcing plan seems to be working perfectly - a true vision of efficiency!
Posted by Adam Hughes
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