House Votes to Bar IRS From Outsourcing Tax Collection

The House of Representatives took a strong step this week in support of America's taxpayers by voting to keep their private and sensitive tax information out of the hands of debt collectors.

The action came in bipartisan approval of an amendment to the 2005 Transportation-Treasury spending bill that would prevent the Internal Revenue Service from using any funds to contract with private sector debt collectors to collect tax debts. The Senate is considering a separate version of the spending bill.

The amendment's sponsor, Rep. Shelley Moore Capito (R-WV) said the use of private debt collection companies for this purpose "should be cause for alarm."

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) praised Rep. Capito's leadership in protecting the private and sensitive information of America's taxpayers and safeguarding them from overly aggressive tax collection efforts. She also thanked Rep. Chris Van Hollen (D- MD), who last year proposed a resolution opposing tax debt privatization.

President Kelley has been leading the fight not only against privatizing tax collection but against the administration's continuing efforts to contract to the private sector as many as one out of every two federal jobs. NTEU is the largest independent federal union, representing 150,000 employees in 30 agencies and departments, including nearly 98,000 in the IRS.

President Kelley applauded the House action, calling it an important step in the right direction, and she urged Congress to approve the funding bill with the ban on tax debt privatization intact. The IRS tried this once before, with a pilot program in 1996. The results were so bad, both in terms of harassment of taxpayers -- in violation of the Fair Debt Collection Practices Act -- and financial results, that a planned program for the next year was cancelled. Rep. Capito, noting that the costs far outweighed the benefits, referred to that effort as "inefficient government."

The current tax debt privatization proposal would pay debt collectors a bounty of up to 25 percent of the money they collect. At the same time, the IRS has said that, given a modest increase in enforcement resources, agency employees could collect more than $9 billion-or nearly 10 times as much as private debt collectors.

The push to privatize tax debt collection is just one part of an ongoing effort by this administration to contract out to the private sector as many as one out of every two federal jobs.

Source: National Treasury Employees Union

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