Debt Unto Uncle Sam

I had an anonymous source at the IRS who told me years ago that if my refund was less than 10K I was pretty safe from an audit. Since we've never had to PAY more than that, either, I figured it was a general cut-off number for the IRS.

Apparently not. In 2006 the IRS began using private collection agencies to hunt down tax debtors who owe, for the most part, in the 5-10K range. Since 2006 these private agencies have collected about $20 million in unpaid taxes.

Last year, the same year the program went into effect, the House voted to reduce the IRS budget for outside collections to $1 million, which, according to the IRS, would kill the program. The Senate sat on it until it died and the private collection companies are still being used to collect public debts.

So, let me get this straight. They have to spend MORE than 1/20 of what they collect in order to collect. How much more? The accountingweb article I read didn't say, but I may have to look into it.

And, of course, that is completely separate from the issue of Uncle Sam handing out our tax records (well, okay, those of delinquent tax-non-payers) to private companies. Yea, NOT cool.