[Congressional Record Volume 151, Number 42 (Tuesday, April 12, 2005)]
[Extensions of Remarks]
[Page E627]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




INTRODUCTION OF THE TAXPAYER ABUSE PREVENTION ACT: CONGRESS SHOULD NOT 
                ALLOW BOUNTY HUNTERS TO ABUSE TAXPAYERS

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                         HON. CHRIS VAN HOLLEN

                              of maryland

                    in the house of representatives

                        Tuesday, April 12, 2005

  Mr. VAN HOLLEN. Mr. Speaker, I rise to announce that today I 
introduced the Taxpayer Abuse Prevention Act of 2005. If enacted into 
law, this bill would repeal the provision tacked onto the FY2005 
Omnibus Appropriations bill that hands over the tax returns of millions 
of American taxpayers to private contractors to collect delinquent 
taxes, and to keep 25 percent of their take as a commission for 
services rendered.
  This provision opens the door to taxpayer intimidation and abuse, 
practices that have been outlawed by Congress. This practice amounts to 
bounty-hunting--at taxpayer expense--by allowing collection agencies to 
harass those same American taxpayers, many of whom are guilty of 
nothing, with the incentive of collecting their commission as their 
primary motivation. Giving unaccountable outside bounty hunters 
unfettered access to Americans' personal financial data poses a risk 
that we just cannot afford, and that is why these organizations oppose 
the IRS proposal: Citizens for Tax Justice, Consumer Federation of 
America, Consumers Union, National Consumer Law Center, National 
Consumers League.
  Late last year, Congress enacted H.R. 4520, the corporate tax bill, 
which included a provision that will give the IRS the authority to use 
private collection agencies to collect tax debt. This means that up to 
2.6 million tax returns--which until then were only scrutinized by 
federal government employees--will now be open to private collection 
agencies and an untold number of private debt collection staff.
  What's more worrisome is the IRS' inability to oversee the work of 
these private debt collectors. A 1996 pilot program for private 
collection was so unsuccessful that a similar pilot program planned for 
1997 was cancelled outright. The contractors used in the pilot programs 
regularly broke the Fair Debt Collection Practices Act, did not protect 
the security of personal taxpayer information, and even then failed to 
bring in a net increase in revenue.
  The IRS has said that it has learned from the 1996 project and is 
better equipped to address the problems raised. However, even recent 
evidence is to the contrary. An eye-opening report by the Treasury 
Inspector General for Tax Administration (TIGTA Audit #200320010) shows 
how IRS contractors put taxpayers' data at risk. The TIGTA audit found 
that the ``lack of oversight of contractors resulted in serious 
security vulnerabilities.'' The report found that ``contractors 
blatantly circumvented IRS policies and procedures even when security 
personnel identified inappropriate practices.'' In fact, the report 
found that contractors made hundreds of calls to taxpayers during times 
prohibited by the FDCPA, and that calls were even placed as early as 
4:19 a.m.

  The objective of the review was ``to determine whether the Internal 
Revenue Service (IRS) has adequately protected Federal Government 
equipment and data from misuse by contractors.'' The review found: 
``The involvement of non-IRS employees in critical IRS functions 
increases the risk of misuse or unauthorized disclosure of taxpayer 
data, and could lead to loss of equipment or sensitive taxpayer data 
through theft or sabotage.''
  While IRS employees are explicitly forbidden from being evaluated on 
the basis of revenue collected, the private collection scheme would 
actually link contractor pay to the amount of revenue collection. This 
policy encourages contractors to use aggressive collection techniques 
to boost their remuneration. Furthermore, the IRS is currently liable 
for damages to a taxpayer resulting from the misuse of confidential 
information by an IRS employee, but taxpayers will not be able to 
recover damages from the federal government where contractors are 
guilty of malfeasance.
  The House had already expressed its will that this provision not 
become law when it approved by voice vote an amendment to the FY2005 
Treasury Appropriations bill that prevented the expenditure of any 
federal funds for private collection of federal taxes. Unfortunately, 
the Treasury Appropriations bill never became law, and the House-passed 
amendment was stripped out of the omnibus spending bill by the 
Republican leadership in the conference--behind closed doors, in the 
dead of night.
  We must repeal this onerous provision. We must protect American 
taxpayers from intimidation and abuse. We must ensure that personal 
financial records are protected and remain private. Two decades ago 
this Congress passed the Fair Debt Collection Practices Act 
specifically to protect Americans from intimidation and abuse, but last 
year this Congress perpetrated an injustice by allowing these very 
abuses to go forward.
  I urge my colleagues to join me in working with the IRS to find a 
more effective means of collecting delinquent tax debt collection and 
avoid this risky scheme altogether. Let's pass the Taxpayer Abuse 
Prevention Act.

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