WASHINGTON, Oct. 10 /PRNewswire-USNewswire/ -- In a victory for U.S. taxpayers, the House of Representatives today voted to repeal an Internal Revenue Service (IRS) program which contracts out tax collection to private-sector debt collectors, the leader of the union representing IRS employees said.
H.R. 3056, the Tax Collection Responsibility Act of 2007, approved by the House, repeals the IRS authority to hire private collection agencies to pursue tax debts. President Colleen M. Kelley of the National Treasury Employees Union (NTEU), who has been leading the fight against the IRS contracting program, praised the members of the House for taking the necessary step to end a misguided program that has already resulted in dozens of taxpayer complaints to the IRS.
"The Tax Collection Responsibility Act of 2007 is the most definitive declaration yet of the clear, strong and bipartisan opposition in Congress and among taxpayers to the IRS's use of private debt collectors and a major step forward in stopping this misguided, costly program," said Kelley.
The legislation, introduced by Rep. Charles Rangel (D-N.Y.), is the latest demonstration of the bipartisan opposition to the IRS program of hiring private debt collectors to pursue tax debt in exchange for a bounty of up to 25 percent of the money they collect.
Joining NTEU and lawmakers in voicing concerns over the program are the National Taxpayer Advocacy Panel, the National Taxpayer Advocate and a number of public advocacy groups. Just yesterday, a coalition of six public interest groups teamed up with NTEU to issue a joint letter to representatives urging their support for H.R. 3056. "Privatizing federal tax collection is a waste of taxpayer dollars, invites overly aggressive collection techniques and jeopardizes the financial privacy of American taxpayers," the group wrote.
As IRS officials repeatedly acknowledged, IRS employees can perform the work at a far lower cost than private companies. The return on investment from using IRS employees is more than 13 to 1, while it is less than 4 to 1 when using private companies.
These serious flaws were underscored at a May House Ways and Means Committee hearing. Along with ballooning start-up costs and high commission costs, the program has resulted in at least 72 taxpayer complaints to the IRS since last fall alone. During the lengthy hearing, lawmakers listened to audio tapes of taxpayers complaining of phone calls at inappropriate times, multiple calls to one telephone number, and calls in which taxpayers are asked to provide their social security numbers but are not told the nature of the call.
The IRS has spent $71 million so far on start-up costs, a huge jump from the $10 to $15 million the agency originally said the program would cost.
NTEU is the largest independent federal union, representing 150,000 employees in 31 agencies and departments.
National Treasury Employees Union
