In this tax season, as millions of Americans fill out their returns, consider this: One out of every six dollars that is supposed to be paid in taxes goes uncollected. All told, the Internal Revenue Service pegged the tax gap at $290 billion in 2001, and reducing it could go some distance toward reducing the near-record $410 billion deficit expected by the White House this fiscal year.

However, an IRS program to enlist private debt collection agencies to do some of the IRS' dirty work has drawn the ire of consumer watchdogs. They argue that the program puts taxpayer information in the hands of third parties, outsources a function that inherently belongs to the government and uses resources inefficiently. The private collection agencies have already been found to have violated procedures for informing taxpayers of their rights, and the Government Accountability Office has declared the program in need of more oversight.

This year, the program is projected to collect less than half of what the IRS initially projected. Nina E. Olson, head of the National Taxpayer Advocate Service, an independent arm within the IRS, testified to Congress earlier this month that the private debt-collection program will cost about $7.7 million to run this year and produce net revenues of about $11 million.

That might not seem like a bad return if this were the stock market, but if the IRS spent that same $7.7 million on its automated collection system, it would net at least $91.8 million, according to Olson.

The return-on-investment case seems pretty clear, so what's going on?

The program is part of the broad struggle over the degree to which government functions should be outsourced to private companies. Further complicating the issue are the competing agendas of unionized IRS workers, small-government ideologues and the private tax-collection agencies.

Supporters of privatized debt collection argue that the program recovers money the IRS wouldn't be going after anyway. Any money collected above the program's costs is a net gain, they argue, so the program should be continued.

But if there is that much money out there to be collected, perhaps the IRS should be given more money to do the job. The IRS budget has failed to keep up with inflation over the past six years. For fiscal 2009, the president has requested a 2 percent budget increase over 2008.

Proponents of the privatized debt-collection program invite skepticism by simultaneously endorsing legislation that would treat IRS employees more strictly than it does contractors. A pending bill would require the termination of IRS employees found to have inappropriately accessed tax records. That's fine as far as it goes. But what about private contractors who might do the same? The legislation is silent.