FAIR TAX BLOGBURST 08-23-06

by Julie of Degree of Madness

If you owe back taxes to the federal government, the next call asking you to pay may come not from an Internal Revenue Service officer, but from a private debt collector.

Within two weeks, the I.R.S. will turn over data on 12,500 taxpayers — each of whom owes $25,000 or less in back taxes — to three collection agencies. Larger debtors will continue to be pursued by I.R.S. officers. (link)

So now, private firms will have access to our tax information, or at minimum how much you (may or may not) owe to Uncle Sam. Our tax information is private. Or it was up until now.

Within two weeks, the I.R.S. will turn over data on 12,500 taxpayers — each of whom owes $25,000 or less in back taxes — to three collection agencies. Larger debtors will continue to be pursued by I.R.S. officers. (my emphasis).

And the IRS isn't too particular about the business ethics of the firms they select to receive our tax data:

One of the three companies selected by the I.R.S. is a law firm in Austin, Tex., where a former partner, Juan Peña, admitted in 2002 that he paid bribes to win a collection contract from the city of San Antonio. He went to jail for the crime.

Last month the same law firm, Linebarger Goggan Blair & Sampson, was again in the news. One of its competitors, Municipal Services Bureau, also of Austin, sued Brownsville, Tex., charging that the city improperly gave the Linebarger firm a collections contract that it suggested was influenced by campaign contributions to two city commissioners.

And how will these debt collectors be paid? They will receive 25% of what they collect. Whether or not the tax bill is accurate or actually owed at all (the IRS is in a league of its own when it comes to mistakes, errors and general incompetence), will not be the concern of these collectors.

And the privacy issue is not insignificant. It's not clear whether these firms will be given the taxpayer social security number, but:

Private collectors will have authority to set up installment payment agreements, and gather financial information about those targeted, presumably to assess their ability to pay or to locate assets that might be
attached.

Private collectors will have the authority to gather our personal financial information. Authority handed over to them by the federal government. Most everyone is aware of the aggressive, heavy-handed methods of collections agencies. I guess a partnership with the IRS just makes sense. A marriage made in heaven, so to speak.

The federal government already has too much access to our private financial information. And the ability of the IRS to audit at will, with no constraints or accountability is something we should not tolerate. And should not be forced to tolerate. And now private firms can get in on the action. And profit from it. At our expense.

There are so many good reasons to support the Fair Tax. Preventing the IRS from giving our private financial information to outside firms is just one more.

With the Fair Tax, the IRS will be abolished. No other tax plan under consideration abolishes the IRS. This is important. The IRS operates under the "guilty until proven innocent" theory. And however unjust that may be, that's the way it is. It will never change. The IRS has power that most politicians only dream about. And IRS abuses are legend. And most of the abuses never make the headlines. They are relatively small in nature but very significant to those involved.

The convoluted tax code is an outrage. The enforcer is an even greater outrage. Leave your Constitutional rights at the door when the IRS shows up, 'cause you no longer have any. The IRS has virtually free will to demand access to every single detail of your financial life. With no probable cause.

Some things just can't be reformed. Our tax code is one of them. The IRS is another. With the Fair Tax, we will all pay our fair share, but we won't have to give up our privacy, or our sanity, to do it.

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