TAX DELINQUENCIES INCREASE 21%; IRS WANTS TO USE PRIVATE BILL COLLECTORS

April 3, 2004

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According to a top Treasury representative, in a letter to the Senate Finance Committee, the IRS will not be able to slow the rapid growth of unpaid taxes without the use of private collection professionals.

IRS Chief Counsel nominee Donald Korb, responding to Committee questions posed during his March 9 confirmation hearing, said the IRS has not been able to keep pace with the growing amount of potentially collectible tax debt, which currently stands at roughly $16.5 billion or 1.3 percent of annual tax revenue. Deputy Treasury Secretary Samuel Bodman made similar comments in his written response to the Committee after his February 10 confirmation hearing.

Korb also indicated said unpaid taxpayer debt has increased by 21 percent between September 2000 and January 2004. Nearly 40 percent of that amount has been placed in “deferred” status; meaning the IRS does not consider the money to be a collection priority. Korb suggested private collectors should be given the easiest cases to collect on, such as when a taxpayer filed a return indicating money was due without including the check.

SOURCE: CLLA ListServe