Bill Seeks Repeal Of IRS Private Debt Collection

by Leroy Baker, Tax-News.com, Washington

04 February 2009

Legislation has been introduced into the US House of Representatives to repeal the Internal Revenue Service’s authority to use private contractors to collect federal taxes.

“The collection of federal taxes is a core government function that should only be performed by the IRS,” said Ways and Means Oversight Subcommittee Chairman John Lewis, a Georgia Democrat who is joined in support of the bill by 15 committee colleagues.

The Oversight Subcommittee has attempted many times to end the private debt collection program, and this legislation is similar to measures that have passed the House of Representatives in recent years, but have not been taken up by the Senate.

Advocates of the private tax debt collection program, which launched in September 2006, argue that it frees up valuable human and financial resources within the IRS which can be redirected towards cracking down on more serious tax evasion. But the program's critics counter that the IRS can collect tax debts much more cheaply than private companies. Opponents have also accused some unscrupulous private collectors of illegally harassing taxpayers.

“The Ways and Means Committee has received testimony from a number of sources, including former IRS officials, that the IRS can collect Federal taxes cheaper and more efficiently than the private collection agencies," Lewis went on to argue.

"This bill would end this program once and for all. In this economic downturn, taxpayers must be able to deal with the IRS directly to work through any difficulties they may encounter," he added.

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