May 5, 2017

With the recent passage of legislation encouraged by Sens. Charles Grassley, R-Iowa, and Chuck Schumer, D-N.Y., the Internal Revenue Service is kick-starting the use of private debt-collection companies to chase down delinquent taxpayers.

There are at least two good reasons this legislation is wrong, and why Sen. Grassley is wrong for supporting this legislation.

First and foremost, the imposition of taxes and the collection of taxes is a fundamental government function and is firmly embedded in Article I, Section 8 of the U.S. Constitution.

Second, apart from its being a fundamental government function, the delegation  of this power to private debt collectors is not in the best interests of the people of the United States.

It is not in the best interests because it effectively cloaks the scammers and con artists with the government imprimatur as they prey on unsuspecting citizens, especially our senior citizens.

The telephonic threats by these con artists of immediate litigation and/or arrest have stolen millions of dollars from thousands of senior citizens because of the widespread fear of the power of the Internal Revenue Service.

In any one year, millions of people have received these robo phone calls in which an ominous voice leaves a message that this is “final warning before litigation is being filed today” and that you can only “avoid this litigation by calling this number and making an immediate payment.”

In recent years I have received a number of these calls, as have many of my friends and family.

Up until now, the damage from these robo calls has been tempered by widespread assurances that the Internal Revenue Service never uses telephone calls to pursue taxpayers in that same manner.

But now, those assurances will lose their credibility because some of these calls may actually be from a debt collector acting on authority from the Internal Revenue Service.

Now, it will be more difficult for unsuspecting senior citizens to challenge these calls, and they are likely to lose even more money in the years to come.

Sen. Grassley has long been an advocate for privatizing the collection of taxes. Back in 2009, when the Obama administration eliminated private debt collectors for taxes, in a posting on his own website, he argued that private debt collectors  were better at collecting taxes than the IRS and besides, using private debt collectors “provides jobs to hundreds of people ... including 60 in Iowa.”

Looking into it, it appears that one of the four private debt-collection companies being authorized to collect taxes — often with a fee of 25 percent of what they collect — is the CBE Group in Cedar Falls, Iowa.

It is also worth noting that two of the other three debt-collecting companies are from New York, home to Sen. Schumer, the other primary booster of using private debt collectors.

I don’t think it is a coincidence that three of the four private debt collectors being authorized to act on behalf of the Internal Revenue Service are located in states represented by two senators who are the most prominent advocates of using private debt collectors to pursue unpaid federal taxes.

Just this past April, Sen. Grassley reiterated his support of tax collection by private debt collectors, blaming the IRS for failing to collect enough of these past-due taxes, and then seeking to reassure that “the IRS doesn’t take financial information over the phone, so any scammers who ask for such information are just that,” as if our unsuspecting senior citizens will focus on that nuance.

Sen. Grassley has been a good senator for Iowa, and he has engendered great pride for Iowans. He has done this with a long record of principled decisions that have been good for Iowa and good for the country.

But I believe he is wrong on this point.

And he is wrong on this point, not just because he appears to be promoting one company in Iowa at the risk of further endangering the financial security of thousands of senior citizens, but because he is telling the government to abdicate one of its most fundamental government functions, as authorized and empowered in Article I, Section 8, of the U.S. Constitution.