House Passes End to Private Tax Collection
Chairman Charlie Rangel of the Ways and Means Committee, the sponsor of the bill, spoke on the floor:
| Chairman Rangel: "We've had many hearings, and the Internal Revenue Service on more than one occasion had indicated that given the resources they could do a more effective job than having this subcontracting out to private firms. There's nothing magic about privatization, just saying that it's privatized doesn't mean that it's more effective or that you're doing the right thing." |
The bill would repeal the 2004 provisions that give the IRS authority to enter into contracts with private companies to collect federal income taxes. Numerous cases have been identified that illustrate taxpayer harassment, abusive calling, and violations of taxpayer rights, the Fair Debt Collection Act, and taxpayer return disclosure protections. For example, one elderly couple was called 150 times, including five times a day, asking for a taxpayer. Within the first five calls, the debt collector knew that the taxpayer did not reside at the home. Calls continued for 27 more days with 1-7 calls per day. Other cases involve people in nursing homes, those serving in Iraq, innocent spouses and those subject to identity theft. The bill would also delay the application of an onerous three percent withholding requirement on government payments, and discourage individuals who renounce their U.S. citizenship to avoid paying taxes.