[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1621 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 1621

 To amend the Internal Revenue Code of 1986 to repeal the authority of 
  the Secretary of the Treasury to enter into private tax collection 
                               contracts.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 13, 2005

 Mr. Simmons (for himself, Mr. Van Hollen, Mrs. Capito, Mr. Ferguson, 
  Mr. Rogers of Michigan, Mr. Wilson of South Carolina, Mr. Hoekstra, 
  Mrs. Miller of Michigan, Mr. Gerlach, Mr. McCotter, Mr. McHugh, Mr. 
Shimkus, Mr. Davis of Kentucky, Mr. Smith of New Jersey, Mr. Pitts, Mr. 
 LoBiondo, Mr. Hayes, Mr. Hoyer, Mr. Moran of Virginia, Ms. Kilpatrick 
of Michigan, Ms. Roybal-Allard, Ms. Linda T. Sanchez of California, Mr. 
    Cardin, Ms. Norton, Mr. Bishop of New York, Mr. Price of North 
 Carolina, Mr. Cooper, Mr. Tiberi, Mr. Holt, Mr. Rangel, Mr. Frank of 
 Massachusetts, Ms. Foxx, and Mr. LaTourette) introduced the following 
      bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to repeal the authority of 
  the Secretary of the Treasury to enter into private tax collection 
                               contracts.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Taxpayer 
Protection Act of 2005''.
    (b) Findings.--The Congress finds the following:
            (1) The integrity of the Federal tax system is integral to 
        the efficient and ongoing functioning of representative 
        democracy.
            (2) A pillar of exemplary citizenship is compliance with 
        the Federal tax code as it pertains to individual income taxes.
            (3) Individual taxpayers voluntarily disclose sensitive 
        personal information to the Federal Government with the 
        expectation that such information will be utilized and retained 
        only by qualified, trained, and accountable personnel of the 
        Internal Revenue Service (IRS) .
            (4) Although the IRS has stated that there will be tight 
        restrictions on what information will be released to private 
        collection agencies, the statute places no restrictions on what 
        information may be released to private collection agencies.
            (5) More than 26 million Americans have, since 1990, been 
        victims of some form of ``identity theft'' through 
        misappropriation and misuse of their personal information.
            (6) Disclosure of taxpayer information to nongovernmental, 
        third party vendors will increase the risk of wrongful 
        disclosure of taxpayer information that results in higher 
        incidences of ``identity theft''.
            (7) The IRS has already demonstrated its inability to 
        protect taxpayer data from unauthorized disclosure under 
        existing vendor contracts as documented in an internal report 
        by the Department of Treasury Inspector General for Tax 
        Administration.
            (8) The IRS Restructuring and Reform Act of 1998 
        specifically prevents employees or supervisors at the IRS from 
        being evaluated or compensated based on how much they collect 
        in order to prevent incentives for overly aggressive and 
        abusive tactics.
            (9) The compensation scheme for private tax collection 
        agencies is a recovery fee of up to 25 percent of funds 
        collected that will lead to overzealous and abusive collection 
        tactics against taxpayers.
            (10) The Congress has previously rejected the use of 
        private tax collection agencies by canceling a pilot program in 
        1996 due to violations by private collection agencies of the 
        Fair Debt Collection Practices Act, inadequate protection of 
        sensitive taxpayer information, and a loss of approximately $17 
        million during the pilot program.
            (11) A 2002 report by the IRS Commissioner to the IRS 
        Oversight Board identified an additional $30 billion in taxes 
        owed that could be collected annually by increased funding for 
        IRS personnel. A $9 billion annual increase in revenue could be 
        achieved by earmarking approximately $300 million to specific 
        IRS collection functions, for a return of $30 for every $1 
        spent.
            (12) Due to the vagaries of the budget scoring process, 
        additional funds collected by IRS personnel do not ``score'' as 
        increased revenues.
            (13) The use of private collection agencies was deemed a 
        ``new tool'' to the IRS Commissioner that resulted in increased 
        revenue being ``scored'' to the Federal Government when such 
        activity would actually result in increased cost to taxpayers.
            (14) Members of the House of Representatives were not 
        afforded the opportunity to specifically vote on this 
        significant policy change during consideration of H.R. 4520, 
        the American Jobs Creation Act of 2004, in the 108th Congress.

SEC. 2. REPEAL OF AUTHORITY TO ENTER INTO PRIVATE TAX COLLECTION 
              CONTRACTS.

    (a) In General.--Subchapter A of chapter 64 of the Internal Revenue 
Code of 1986 (relating to collection) is amended by striking section 
6306.
    (b) Conforming Amendments.--
            (1) Subchapter B of chapter 64 of such Code is amended by 
        striking section 7433A.
            (2) Section 7809(a) of such Code is amended by striking 
        ``6306,''.
            (3) Section 7811 of such Code is amended by striking 
        subsection (g).
            (4) Section 1203 of the Internal Revenue Service 
        Restructuring Act of 1998 is amended by striking subsection 
        (e).
            (5) The table of sections of subchapter A of chapter 64 of 
        such Code is amended by striking the item relating to section 
        6306.
            (6) The table of sections of subchapter B of chapter 64 of 
        such Code is amended by striking the item relating to section 
        7433A.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act but shall not apply to 
any contract entered into before such date.
    (d) Termination of Reporting Requirement.--The reporting 
requirement of section 881(e) of the American Jobs Creation Act of 2004 
shall not apply after the date of the enactment of this Act.
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