House Ways and Means Committee votes to stop IRS debt collection program

On Wednesday, the House Ways and Means Committee agreed to pull the plug on the IRS's controversial debt collection program. The IRS has been contracting out a portion of its federal tax debt collection to private companies.

"The collection of taxes is a core government function," said Representative John Lewis (D-GA). "It is the Internal Revenue Service's mission. We found that, in addition to taxpayer harassment, this program wastes tax dollars by paying a bounty up to 24 percent to the debt collectors."

Prior to the private industry debt collection program, IRS debt collection was performed by IRS employees.

Colleen M. Kelley, president of the National Treasury Employees Union (NTEU), described the House committee action as a "concrete step" toward ending the private collection program.

"Revoking the IRS' authority to hire private tax collectors ensures that taxpayers will be protected from abusive collection methods and that the tax collection work of the government will be carried out in a cost-effective manner," said Kelley.

Critics of the private debt collection program have claimed that the IRS is able to collect its debts more efficiently and less expensively than the outside collectors.

In similar action, the Senate Appropriations Committee last week passed legislation signaling serious concern with the IRS private tax debt collection program by limiting funding for the initiative in the 2008 Financial Services and General Government Appropriations bill.

NTEU has been leading the fight against the privatization of the inherently governmental function of collecting taxes, and has been joined in its call for repeal of IRS authority to engage in the practice by the agency’s own National Taxpayer Advocate and by a variety of national consumer protection groups.

Along with the cost issue, NTEU and other opponents of the program have cited the serious risk to taxpayers' personal and sensitive information by putting it in the hands of private companies.

You may like these other stories...

IRS must take oath on Lerner emails: judgeMackenzie Weinger of Politico reported on Thursday that a federal judge ordered the IRS to explain under oath how it lost emails connected to Lois Lerner, the ex-IRS official at the...
The Republican-controlled House of Representatives passed a bill on Friday morning that would permanently extend the bonus depreciation tax break for businesses.The measure, HR 4718, which was crafted by Representative Pat...
The Republican-led House of Representatives is expected to pass a bill this week that would permanently extend the bonus depreciation tax break. But don’t expect President Obama to sign it.The Obama administration said...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.