109 HR 1621 IH: Taxpayer Protection Act of 2005 U.S. House of Representatives 2005-04-13 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 109th CONGRESS 1st Session H. R. 1621 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. Sánchez 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.

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.

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.