Despite concerns expressed by consumer groups and some in Congress, the IRS is about to unleash private debt collectors on delinquent taxpayers.

According to various news reports, the National Treasury Employees Union says its workers have received emails confirming that the controversial program will begin at the end of August.

"Congress gave us this tool, and I'm going to do everything I can to get every nickel that's owed to the government," IRS Commissioner Mark Everson said.

But some in Congress want to take that tool away (as mentioned in this previous blog item). The House approved the IRS' 2007 budget in June, but refused to provide money for private debt collectors in the next fiscal year, which begins Oct. 1. There is no similar restriction in the Senate's funding measure.

If both House and Senate agree to pull the money for the program, Everson said his department would "immediately stand down."

Promises, promises: Everson said the private collection effort will begin with "a modest number of cases" and then will "ramp up deliberately and very carefully" to ensure that taxpayer privacy is protected.

Right. And the check is in the mail. And I'll still love you in the morning.

The NTEU opposes the program, calling it a "foolish endeavor." That's not a surprise, since the Union wants to protect its members' jobs. But given the reputation of debt collectors, it's hard to argue with plan opponents.

An even more disturbing aspect of the program is that the IRS reportedly will refer taxpayers' questions about debt collection notices to the private companies.

That's reassuring. This guy is harassing me and I need to talk to the agency that's sicced him on me, but the agency is bouncing me back to the cause of my problem. Wonderful! Thanks for nothing.

Now don't get me wrong. I think everyone should pay their taxes. But I also think that the government agency that was created to handle tax filings and payments should be doing the job itself.

Information contained in tax paperwork is sensitive financial and personal data and the fewer places it's spread around, the better. And debt collectors, especially working on commission, might be a little overzealous in doing their jobs. It wouldn't be the first time.

Plus, these private collection agents aren't going to be able or willing to work with people who have legitimate reasons for falling behind on their tax bills. They're just going to be out there doing whatever it takes to get the money to the U.S. Treasury.

In-house vs. outsource: The IRS has long argued that it doesn't have the personnel to collect all the money it is owed. The agency contends that private debt collectors could pull in about $1.4 billion over 10 years.

The three companies (previous blog details on their hiring here, on complaints about their hiring here and the resolution of those complaints here) that will begin tracking down tax delinquents in a few weeks were hired under a provisions of a 2004 law. The collectors will be paid a percentage of each debt they bring in.

But Everson also acknowledged to a Congressional panel in March that debt collection outsourcing actually is more costly than using federal personnel. It's more appealing from a bookkeeping standpoint, he explained, because additional IRS staff shows up as a liability on the agency's federal budget, putting the tax agency at a disadvantage as it competes with other federal offices for limited funding.

So that's why the agency is dismissing auditors who investigate estate and gift tax filings. You know, those returns of the wealthiest Americans.

The cuts -- 157 of the IRS' 345 estate tax lawyers, plus 17 support staff -- will begin next month, according to the New York Times, which was given copies of internal documents detailing the move.

The official word is that since fewer people now pay estate taxes, such a large contingent of IRS lawyers to investigate their filings is unnecessary.

Yep, it's purely a budgetary issue, no improper effort to sidestep examination of the returns of wealthy, politically well-connected campaign contributors some taxpayers.

Read more: More on the elimination of IRS estate tax lawyer positions can be found here (paid subscription required; sorry).

But you can read more, for free, on the latest development in the private tax debt collection saga in the Washington Post, CollectionIndustry.com, the Minneapolis Star-Tribune (Dow Jones News Service) and Federal News Radio.