HR 695 IHCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to repeal the authority of the Secretary of the Treasury to enter into private tax collection contracts.CommentsClose CommentsPermalink

January 24, 2007

Mr. VAN HOLLEN (for himself, Mr. ROTHMAN, Mr. CARNAHAN, Mr. BISHOP of New York, Mr. BRADY of Pennsylvania, Mrs. CAPITO, Ms. CARSON, Mr. CHANDLER, Mrs. CHRISTENSEN, Mr. CLAY, Mr. CLEAVER, Mr. COHEN, Mr. CUMMINGS, Mr. DEFAZIO, Mr. DINGELL, Mr. DOYLE, Mr. FARR, Mr. FATTAH, Mr. FILNER, Mr. GRIJALVA, Mr. HARE, Mr. HAYES, Ms. KILPATRICK of Michigan, Mr. KUCINICH, Mr. LANTOS, Mr. LATOURETTE, Mr. LEWIS of Georgia, Mr. MANZULLO, Mr. MCHUGH, Ms. MOORE of Wisconsin, Mr. MORAN of Virginia, Mr. PATRICK J. MURPHY of Pennsylvania, Ms. NORTON, Mr. OBEY, Mr. PAYNE, Mr. PRICE of North Carolina, Mr. RUPPERSBERGER, Ms. SCHAKOWSKY, Ms. SCHWARTZ, Mr. SERRANO, Mr. SIRES, Mr. STARK, Mr. STUPAK, Ms. WATSON, and Mr. WAXMAN) introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to repeal the authority of the Secretary of the Treasury to enter into private tax collection contracts.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE; FINDINGS.

(a) Short Title- This Act may be cited as the `Taxpayer Abuse and Harassment Prevention Act of 2007'.CommentsClose CommentsPermalink





(b) Findings- The Congress finds the following:CommentsClose CommentsPermalink





(1) The integrity of the Federal tax system is integral to the efficient and ongoing functioning of representative democracy.CommentsClose CommentsPermalink





(2) A pillar of exemplary citizenship is compliance with the Federal tax code as it pertains to individual income taxes.CommentsClose CommentsPermalink





(3) Individual taxpayers voluntarily disclose sensitive personal information to the Federal Government with the expectation that such information will be utilized and retained only by qualified, trained, and accountable personnel of the Internal Revenue Service (IRS).CommentsClose CommentsPermalink





(4) Although the IRS has stated that there will be tight restrictions on what information will be released to private collection agencies, the statute places no restrictions on what information may be released to private collection agencies.CommentsClose CommentsPermalink





(5) More than 26 million Americans have, since 1990, been victims of some form of `identity theft' through misappropriation and misuse of their personal information.CommentsClose CommentsPermalink





(6) Disclosure of taxpayer information to nongovernmental, third party vendors will increase the risk of wrongful disclosure of taxpayer information that results in higher incidences of `identity theft'.CommentsClose CommentsPermalink





(7) The IRS has already demonstrated its inability to protect taxpayer data from unauthorized disclosure under existing vendor contracts as documented in an internal report by the Department of Treasury Inspector General for Tax Administration.CommentsClose CommentsPermalink





(8) The IRS Restructuring and Reform Act of 1998 specifically prevents employees or supervisors at the IRS from being evaluated or compensated based on how much they collect in order to prevent incentives for overly aggressive and abusive tactics.CommentsClose CommentsPermalink





(9) The compensation scheme for private tax collection agencies is a recovery fee of up to 25 percent of funds collected that will lead to overzealous and abusive collection tactics against taxpayers.CommentsClose CommentsPermalink





(10) The Congress has previously rejected the use of private tax collection agencies by canceling a pilot program in 1996 due to violations by private collection agencies of the Fair Debt Collection Practices Act, inadequate protection of sensitive taxpayer information, and a loss of approximately $17 million during the pilot program.CommentsClose CommentsPermalink





(11) A 2002 report by the IRS Commissioner to the IRS Oversight Board identified an additional $30 billion in taxes owed that could be collected annually by increased funding for IRS personnel. A $9 billion annual increase in revenue could be achieved by earmarking approximately $300 million to specific IRS collection functions, for a return of $30 for every $1 spent.CommentsClose CommentsPermalink





(12) Due to the vagaries of the budget scoring process, additional funds collected by IRS personnel do not `score' as increased revenues.CommentsClose CommentsPermalink





(13) The use of private collection agencies was deemed a `new tool' to the IRS Commissioner that resulted in increased revenue being `scored' to the Federal Government when such activity would actually result in increased cost to taxpayers.CommentsClose CommentsPermalink





(14) Members of the House of Representatives were not afforded the opportunity to specifically vote on this significant policy change during consideration of H.R. 4520, the American Jobs Creation Act of 2004, in the 108th Congress.CommentsClose CommentsPermalink

SEC. 2. REPEAL OF AUTHORITY TO ENTER INTO PRIVATE TAX COLLECTION CONTRACTS.

(a) In General- Subchapter A of chapter 64 of the Internal Revenue Code of 1986 (relating to collection) is amended by striking section 6306.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Subchapter B of chapter 64 of such Code is amended by striking section 7433A.CommentsClose CommentsPermalink





(2) Section 7809(a) of such Code is amended by striking `6306,'.CommentsClose CommentsPermalink





(3) Section 7811 of such Code is amended by striking subsection (g).CommentsClose CommentsPermalink





(4) Section 1203 of the Internal Revenue Service Restructuring Act of 1998 is amended by striking subsection (e).CommentsClose CommentsPermalink





(5) The table of sections of subchapter A of chapter 64 of such Code is amended by striking the item relating to section 6306.CommentsClose CommentsPermalink





(6) The table of sections of subchapter B of chapter 64 of such Code is amended by striking the item relating to section 7433A.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall take effect on the date of the enactment of this Act.CommentsClose CommentsPermalink





(d) Termination of Reporting Requirement- The reporting requirement of section 881(e) of the American Jobs Creation Act of 2004 shall not apply after the date of the enactment of this Act.CommentsClose CommentsPermalink