Privatized tax collection

Private tax collection had been attempted periodically in the United States, but a major program to formalize it was tried starting in 1872. In that year, Congress enabled contracts between private citizens and the Treasury Department to collect delinquent taxes for the Internal Revenue Service, with the collector entitled to retain fifty percent of the proceeds. It was found by the House Ways and Means Committee that one of the collectors, John D. Sanborn, used information already brought to light by government employees in his collections, and had listed in one of his contracts the names of every railroad in the United States as being liable to collection of taxes on certain dividends. The episode was called the Sanborn incident, and was tied to the resignation of William Adams Richardson as Secretary of the Treasury. ==Examples of companies that collected taxes==

• Capita Group == Privatization of tax collection ==

In essence, privatization of tax collection began when governments shifted from official assessment of the duties and taxes owed to the procedure of ‘’self-assessment’’ by the taxpayers. In this procedure, the tax-payer calculates his own tax liability and pays taxes based on that. Government verified genuineness of such self-assessment through a process of audit, which may be selective or blanket (applied to all tax-payers). == Services of PSI companies ==

Pre-shipment inspection (PSI) agencies are companies that carry out physical inspection of the cargo and certify the value of the consignment after verification of the declared price against the ruling international price. Then the Customs authorities calculate the amount of duties and taxes owed on the basis of that certified value.This essentially has shifted the critical task of tax assessment to the PSI companies from the Customs inspectors and appraisers who were supposed to determine the assessable value of a consignment in accordance with the GATT Valuation Code. == References ==