The Internal Revenue Service is probably one of the least popular agencies in the United States government, particularly around the time that taxes are due each year. However, if you asked most taxpayers if they would rather the IRS be replaced by a private company, the answer would probably be “no.” Yet, this is exactly the proposal being made by at least one lawmaker with regards to the IRS’s debt collection practices.

At this point, the IRS does its own tax payment enforcement and that means that for now the government is the main collector on this type of debt. However, if it was delegated to private companies, taxpayers who still owe the IRS money could be subject to more aggressive debt collection practices in addition to the penalties already enforced such as jail time.

At the same time, the money that the IRS collects is crucial revenue to keep the government running and recent data shows that enforcement levels are down overall as the IRS lacks the resources to pursue as much tax debt as they used to. In fact, the amount of tax debt that remained uncollected has increased by about $100 billion over the past ten years. A recent test program revealed that private debt collection has been more effective, and it is authorized by a bill signed into law in 2004.

What do you think – is this a good idea to help collect taxes? Or will private companies treat taxpayers unfairly and make the process worse?

Source: Forbes, “Dog The IRS Bounty Hunter? Private Tax Collectors Are Coming” Robert Wood, Nov. 6, 2013.