Editore"s Note
Tilting at Windmills

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March 20, 2004
By: Kevin Drum

DELINQUENT TAXES....You may all remember that several years ago the IRS came under a lot of criticism, some of it justified, for the highhanded way it handled audits and collections. Congress subsequently ordered the IRS to shift its focus from enforcement to taxpayer service, and since then both the number of audits and the rate of collection have dropped dramatically. Here's the result:

Struggling with rising workloads and stagnant staff levels, the Internal Revenue Service walked away from more than 2 million delinquent tax accounts last year, totaling nearly $16.5 billion, according to the Treasury Department.

....The median size of the delinquent accounts was $14,000. The largest account not being pursued involved more than $50 million.

Rules that restrict the behavior of IRS agents are fine. But failing to collect taxes that are known to be delinquent is just dumb. It costs money and it erodes faith in the fairness of the system.

The IRS wants to add 35,000 enforcement officers. At a guess, that would cost around $2 billion and they'd collect maybe half of that $16 billion. That's a $6 billion win for the government.

Sounds like a no brainer. But of course Republicans hate taxes and they hate government programs even more, so George Bush's suggestion is just what you'd expect: outsource it. Never mind that this didn't work the last time we tried it, and never mind that it wouldn't collect that much money anyway. The Bush White House, after all, is famous for not really caring if its policies actually work.

Then again, if they really think outsourcing will do the job better at a lower cost, why not go whole hog? Outsource it to a call center in India. If it works for Dell, why not the IRS?

Kevin Drum 2:55 PM Permalink | Trackbacks

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