Transportation, Treasury, and Independent Agencies Appropriations Act, 2005

TRANSPORTATION, TREASURY, AND INDEPENDENT AGENCIES APPROPRIATIONS ACT, 2005 -- (House of Representatives - September 15, 2004)

The SPEAKER pro tempore (Mr. Bradley of New Hampshire). Pursuant to House Resolution 770 and rule XVIII, the Chair declares the House in the Committee of the Whole House on the State of the Union for the further consideration of the bill, H.R. 5025.

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Mr. RAMSTAD. Mr. Chairman, I thank the chairman for yielding me this time, and I rise in opposition to the amendment by my colleague and friend from West Virginia.

Preventing the IRS from using the professional services of private collection agencies to help collect past-due income taxes is bad policy for taxpayers, and it is bad for IRS collection efforts. It is fundamentally unfair, Mr. Chairman, to people who pay their taxes for those who do not pay their taxes, the deadbeats, to get off scot-free. And right now, we are losing millions and millions of dollars because of deadbeat taxpayers. In fact, the backlog for the IRS is at $280 billion; that is billion with a "b" and growing every year.

The concerns raised by my friend and colleague can be dispelled by objective study of the IRS proposal. The Subcommittee on Oversight of the Committee on Ways and Means has examined the issue extensively, and we have solid evidence of the success of private collection agencies in collecting other debts for the Federal Government and the more than 40 States that also use them to help collect State income taxes.

First, the security and privacy of sensitive taxpayer information is absolutely essential. Nobody doubts that. That is why IRS employees, anyone performing work under contract with the IRS, would be subject to heavy, heavy criminal penalties for violations of security and privacy.

In addition, a taxpayer could bring a civil suit under the Fair Debt Collection Practices Act against private collection agency employees for any unauthorized disclosure of taxpayer information. So there are protections to guarantee against the type of abuses that have been cited.

Second, private collection agencies would not be compensated solely based on dollars collected. The IRS has developed a set of criteria, including quality of service, taxpayer satisfaction and case resolution, in addition to collection results. These would all be components, elements in determining how PCAs would be paid for the work performed for the IRS.

Third, Mr. Chairman, more than 40 States already use private collection agencies to assist with their State tax collection efforts.

In the last fiscal year, total collections by these private collection agencies for the Department of Education, the Department of Health and Human Services and Treasury were $546 million, up 23 percent from the previous year.

Mr. Chairman, let us get real. Disturbing allegations raised regarding the practices of one contractor should not taint the quality work done by many other collection contractors who are serving the States and Federal Government well. It is important to remember these collection contracts would only involve cases in which the tax liability is not in dispute because taxpayers have admitted to the liability. They have admitted they owe the tax. The more complex cases where liability is disputed would remain with the professional employees at IRS. I urge my colleagues to support taxpayer equity and vote no on this amendment.

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