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Consumer Groups Declare the Government to be More Efficient than Private Collection Agencies at recovering Tax Revenue

In June 1st and 8th letters to members of the House, groups including Republican Congressmen, the National Treasury Employees Union (NTEU), the Consumer Federation of America, National Association for the Advancement of Colored People, National Association of Retired Federal Employees, National Consumer Law Center on behalf of its low-income clients, and the National Consumers League, urged Congress to reject a proposal to allow the IRS to collect taxes using private collection professionals.

The signatories to the letter contend that private tax collection is less cost-effective than using IRS personnel. NTEU stated that with additional agency funding of $296 million, $9.47 billion in known tax debt collections would be realized–a net return of $31 for every $1 invested. By contrast, according to NTEU, the administration’s privatization scheme would, in the best case, result in a net return of only $3 for every taxpayer dollar spent.

In a related story, the same groups that signed onto the letter to the House also commended the Federal Government on its handling of the Whitewater Investigation, the Federal Highway System, the Panama Canal, Medicare and the War on Terrorism, noting that dollars to the government are dollars well spent. Opponents of the letter were laughing too hard to comment.

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