[Congressional Record Volume 153, Number 17 (Monday, January 29, 2007)]
[Extensions of Remarks]
[Page E199]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   INTRODUCTION OF THE TAXPAYER ABUSE AND HARASSMENT 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

                        Monday, January 29, 2007

  Mr. VAN HOLLEN. Madam Speaker, last week I introduced H.R. 695, the 
Taxpayer Abuse and Harassment Prevention Act of 2007, along with 
Representatives Steve Rothman, Russ Carnahan and 42 other original 
cosponsors. If enacted into law, this legislation would repeal the 
provision tacked onto the 2004 corporate tax bill (H.R. 4520, the so-
called American Jobs Creation Act in the 108th Congress) that hands 
over the tax returns of millions of American taxpayers to private 
contractors to collect delinquent taxes, and allows them to keep 25 
percent of their take as a commission for services rendered.
  Three weeks ago, on January 9th, in her annual report to Congress the 
National Taxpayer Advocate identified the IRS' private debt collection 
initiative as one of the most serious problems facing taxpayers and 
called on Congress to repeal the IRS's authority to use private 
collection agencies to collect federal taxes. The Advocate's report 
illustrated why the IRS private tax collection program is a waste of 
taxpayer dollars, invites overly aggressive collection techniques and 
jeopardizes the financial privacy of American taxpayers:
  The IRS's Private Debt Collection initiative is not cost efficient, 
adds unnecessary costs and burdens to taxpayers, diminishes the 
improved image of the IRS, and surrenders too many valuable components 
of our tax administration system. Therefore, Congress should repeal IRC 
Sec. 6306 and thereby terminate the Private Debt Collection initiative.
  We must repeal this provision because it 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.
  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. An audit report of the pilot 
program 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.
  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 
language was stripped out of the FY 2005 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 and 
Harassment Prevention Act.

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