[Congressional Record (Bound Edition), Volume 153 (2007), Part 19]
[House]
[Pages 26995-27015]
[From the U.S. Government Publishing Office, www.gpo.gov]




               TAX COLLECTION RESPONSIBILITY ACT OF 2007

  Mr. RANGEL. Mr. Speaker, pursuant to H. Res. 719, I call up the bill 
(H.R. 3056) to amend the Internal Revenue Code of 1986 to repeal the 
authority of the Internal Revenue Service to use private debt 
collection companies, to delay implementation of withholding taxes on 
government contractors, to revise the tax rules on expatriation, and 
for other purposes, and ask for its immediate consideration in the 
House.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

[[Page 26996]]



                               H.R. 3056

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

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Tax 
     Collection Responsibility Act of 2007''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.
Sec. 2. Repeal of authority to enter into private debt collection 
              contracts.
Sec. 3. Delay of application of withholding requirement on certain 
              governmental payments for goods and services.
Sec. 4. Clarification of entitlement of Virgin Islands residents to 
              protections of limitations on assessment and collection 
              of tax.
Sec. 5. Revision of tax rules on expatriation.
Sec. 6. Repeal of suspension of certain penalties and interest.
Sec. 7. Increase in information return penalties.
Sec. 8. Time for payment of corporate estimated taxes.

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

       (a) In General.--Subchapter A of chapter 64 is amended by 
     striking section 6306.
       (b) Conforming Amendments.--
       (1) Subchapter B of chapter 76 is amended by striking 
     section 7433A.
       (2) Section 7811 is amended by striking subsection (g).
       (3) Section 1203 of the Internal Revenue Service 
     Restructuring Act of 1998 is amended by striking subsection 
     (e).
       (4) The table of sections for subchapter A of chapter 64 is 
     amended by striking the item relating to section 6306.
       (5) The table of sections for subchapter B of chapter 76 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.

     SEC. 3. DELAY OF APPLICATION OF WITHHOLDING REQUIREMENT ON 
                   CERTAIN GOVERNMENTAL PAYMENTS FOR GOODS AND 
                   SERVICES.

       (a) In General.--Subsection (b) of section 511 of the Tax 
     Increase Prevention and Reconciliation Act of 2005 is amended 
     by striking ``December 31, 2010'' and inserting ``December 
     31, 2011''.
       (b) Report to Congress.--Not later than 6 months after the 
     date of the enactment of this Act, the Secretary of the 
     Treasury shall submit to the Committee on Ways and Means of 
     the House of Representatives and the Committee on Finance of 
     the Senate a report with respect to the withholding 
     requirements of section 3402(t) of the Internal Revenue Code 
     of 1986, including a detailed analysis of--
       (1) the problems, if any, which are anticipated in 
     administering and complying with such requirements,
       (2) the burdens, if any, that such requirements will place 
     on governments and businesses (taking into account such 
     mechanisms as may be necessary to administer such 
     requirements), and
       (3) the application of such requirements to small 
     expenditures for services and goods by governments.

     SEC. 4. CLARIFICATION OF ENTITLEMENT OF VIRGIN ISLANDS 
                   RESIDENTS TO PROTECTIONS OF LIMITATIONS ON 
                   ASSESSMENT AND COLLECTION OF TAX.

       (a) In General.--Subsection (c) of section 932 (relating to 
     treatment of Virgin Islands residents) is amended by adding 
     at the end the following new paragraph:
       ``(5) Treatment of income tax return filed with virgin 
     islands.--An income tax return filed with the Virgin Islands 
     by an individual claiming to be described in paragraph (1) 
     for the taxable year shall be treated for purposes of 
     subtitle F in the same manner as if such return were an 
     income tax return filed with the United States for such 
     taxable year. The preceding sentence shall not apply where 
     such return is false or fraudulent with the intent to avoid 
     tax or otherwise is a willful attempt in any manner to defeat 
     or evade tax.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after 1986.

     SEC. 5. REVISION OF TAX RULES ON EXPATRIATION.

       (a) In General.--Subpart A of part II of subchapter N of 
     chapter 1 is amended by inserting after section 877 the 
     following new section:

     ``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

       ``(a) General Rules.--For purposes of this subtitle--
       ``(1) Mark to market.--All property of a covered expatriate 
     shall be treated as sold on the day before the expatriation 
     date for its fair market value.
       ``(2) Recognition of gain or loss.--In the case of any sale 
     under paragraph (1)--
       ``(A) notwithstanding any other provision of this title, 
     any gain arising from such sale shall be taken into account 
     for the taxable year of the sale, and
       ``(B) any loss arising from such sale shall be taken into 
     account for the taxable year of the sale to the extent 
     otherwise provided by this title, except that section 1091 
     shall not apply to any such loss.

     Proper adjustment shall be made in the amount of any gain or 
     loss subsequently realized for gain or loss taken into 
     account under the preceding sentence, determined without 
     regard to paragraph (3).
       ``(3) Exclusion for certain gain.--
       ``(A) In general.--The amount which would (but for this 
     paragraph) be includible in the gross income of any 
     individual by reason of paragraph (1) shall be reduced (but 
     not below zero) by $600,000.
       ``(B) Adjustment for inflation.--
       ``(i) In general.--In the case of any taxable year 
     beginning in a calendar year after 2008, the dollar amount in 
     subparagraph (A) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, by substituting `calendar year 2007' for 
     `calendar year 1992' in subparagraph (B) thereof.

       ``(ii) Rounding.--If any amount as adjusted under clause 
     (i) is not a multiple of $1,000, such amount shall be rounded 
     to the nearest multiple of $1,000.
       ``(b) Election to Defer Tax.--
       ``(1) In general.--If the taxpayer elects the application 
     of this subsection with respect to any property treated as 
     sold by reason of subsection (a), the time for payment of the 
     additional tax attributable to such property shall be 
     extended until the due date of the return for the taxable 
     year in which such property is disposed of (or, in the case 
     of property disposed of in a transaction in which gain is not 
     recognized in whole or in part, until such other date as the 
     Secretary may prescribe).
       ``(2) Determination of tax with respect to property.--For 
     purposes of paragraph (1), the additional tax attributable to 
     any property is an amount which bears the same ratio to the 
     additional tax imposed by this chapter for the taxable year 
     solely by reason of subsection (a) as the gain taken into 
     account under subsection (a) with respect to such property 
     bears to the total gain taken into account under subsection 
     (a) with respect to all property to which subsection (a) 
     applies.
       ``(3) Termination of extension.--The due date for payment 
     of tax may not be extended under this subsection later than 
     the due date for the return of tax imposed by this chapter 
     for the taxable year which includes the date of death of the 
     expatriate (or, if earlier, the time that the security 
     provided with respect to the property fails to meet the 
     requirements of paragraph (4), unless the taxpayer corrects 
     such failure within the time specified by the Secretary).
       ``(4) Security.--
       ``(A) In general.--No election may be made under paragraph 
     (1) with respect to any property unless adequate security is 
     provided with respect to such property.
       ``(B) Adequate security.--For purposes of subparagraph (A), 
     security with respect to any property shall be treated as 
     adequate security if--
       ``(i) it is a bond which is furnished to, and accepted by, 
     the Secretary, which is conditioned on the payment of tax 
     (and interest thereon), and which meets the requirements of 
     section 6325, or
       ``(ii) it is another form of security for such payment 
     (including letters of credit) that meets such requirements as 
     the Secretary may prescribe.
       ``(5) Waiver of certain rights.--No election may be made 
     under paragraph (1) unless the taxpayer makes an irrevocable 
     waiver of any right under any treaty of the United States 
     which would preclude assessment or collection of any tax 
     imposed by reason of this section.
       ``(6) Elections.--An election under paragraph (1) shall 
     only apply to property described in the election and, once 
     made, is irrevocable.
       ``(7) Interest.--For purposes of section 6601, the last 
     date for the payment of tax shall be determined without 
     regard to the election under this subsection.
       ``(c) Exception for Certain Property.--Subsection (a) shall 
     not apply to--
       ``(1) any deferred compensation item (as defined in 
     subsection (d)(4)),
       ``(2) any specified tax deferred account (as defined in 
     subsection (e)(2)), and
       ``(3) any interest in a nongrantor trust (as defined in 
     subsection (f)(3)).
       ``(d) Treatment of Deferred Compensation Items.--
       ``(1) Withholding on eligible deferred compensation 
     items.--
       ``(A) In general.--In the case of any eligible deferred 
     compensation item, the payor shall deduct and withhold from 
     any taxable payment to a covered expatriate with respect to 
     such item a tax equal to 30 percent thereof.

[[Page 26997]]

       ``(B) Taxable payment.--For purposes of subparagraph (A), 
     the term `taxable payment' means with respect to a covered 
     expatriate any payment to the extent it would be includible 
     in the gross income of the covered expatriate if such 
     expatriate were subject to the tax imposed by this chapter. A 
     deferred compensation item referred to in paragraph (4)(D) 
     shall be taken into account as a payment under the preceding 
     sentence when such item would be so includible.
       ``(2) Other deferred compensation items.--In the case of 
     any deferred compensation item which is not an eligible 
     deferred compensation item--
       ``(A) an amount equal to the present value of the 
     expatriate's accrued benefit shall be treated as having been 
     received by such individual on the day before the 
     expatriation date as a distribution under the plan,
       ``(B) no early distribution tax shall apply by reason of 
     such treatment, and
       ``(C) appropriate adjustments shall be made to subsequent 
     distributions from the plan to reflect such treatment.
       ``(3) Eligible deferred compensation items.--For purposes 
     of this subsection, the term `eligible deferred compensation 
     item' means any deferred compensation item with respect to 
     which--
       ``(A) the payor of such item is--
       ``(i) a United States person, or
       ``(ii) a person who is not a United States person but who 
     elects to be treated as a United States person for purposes 
     of paragraph (1) and meets such requirements as the Secretary 
     may provide to ensure that the payor will meet the 
     requirements of paragraph (1), and
       ``(B) the covered expatriate--
       ``(i) notifies the payor of his status as a covered 
     expatriate, and
       ``(ii) makes an irrevocable waiver of any right to claim 
     any reduction under any treaty with the United States in 
     withholding on such item.
       ``(4) Deferred compensation item.--For purposes of this 
     subsection, the term `deferred compensation item' means--
       ``(A) any interest in a plan or arrangement described in 
     section 219(g)(5),
       ``(B) any interest in a foreign pension plan or similar 
     retirement arrangement or program,
       ``(C) any item of deferred compensation, and
       ``(D) any property, or right to property, which the 
     individual is entitled to receive in connection with the 
     performance of services to the extent not previously taken 
     into account under section 83.
       ``(5) Exception.--Paragraphs (1) and (2) shall not apply to 
     any deferred compensation item which is attributable to 
     services performed outside the United States while the 
     covered expatriate was not a citizen or resident of the 
     United States.
       ``(6) Special rules.--For purposes of this subsection--
       ``(A) Application of withholding rules.--Rules similar to 
     the rules of subchapter B of chapter 3 shall apply.
       ``(B) Coordination with other withholding requirements.--
     Any item subject to withholding under paragraph (1) shall not 
     be subject to withholding under section 1441 or chapter 24.
       ``(e) Treatment of Specified Tax Deferred Accounts.--
       ``(1) Account treated as distributed.--In the case of any 
     interest in a specified tax deferred account held by a 
     covered expatriate on the day before the expatriation date--
       ``(A) the covered expatriate shall be treated as receiving 
     a distribution of his entire interest in such account on such 
     date,
       ``(B) no early distribution tax shall apply by reason of 
     such treatment, and
       ``(C) appropriate adjustments shall be made to subsequent 
     distributions from the account to reflect such treatment.
       ``(2) Specified tax deferred account.--For purposes of 
     paragraph (1), the term `specified tax deferred account' 
     means an individual retirement plan (as defined in section 
     7701(a)(37)) other than any arrangement described in 
     subsection (k) or (p) of section 408, a qualified tuition 
     program (as defined in section 529), a Coverdell education 
     savings account (as defined in section 530), a health savings 
     account (as defined in section 223), and an Archer MSA (as 
     defined in section 220).
       ``(f) Special Rules for Nongrantor Trusts.--
       ``(1) In general.--In the case of a distribution (directly 
     or indirectly) of any property from a nongrantor trust to a 
     covered expatriate--
       ``(A) the trustee shall deduct and withhold from such 
     distribution an amount equal to 30 percent of the taxable 
     portion of the distribution, and
       ``(B) if the fair market value of such property exceeds its 
     adjusted basis in the hands of the trust, gain shall be 
     recognized to the trust as if such property were sold to the 
     expatriate at its fair market value.
       ``(2) Taxable portion.--For purposes of this subsection, 
     the term `taxable portion' means, with respect to any 
     distribution, that portion of the distribution which would be 
     includible in the gross income of the covered expatriate if 
     such expatriate were subject to the tax imposed by this 
     chapter.
       ``(3) Nongrantor trust.--For purposes of this subsection, 
     the term `nongrantor trust' means the portion of any trust 
     that the individual is not considered the owner of under 
     subpart E of part I of subchapter J. The determination under 
     the preceding sentence shall be made immediately before the 
     expatriation date.
       ``(4) Special rules relating to withholding.--For purposes 
     of this subsection--
       ``(A) rules similar to the rules of subsection (d)(6) shall 
     apply, and
       ``(B) the covered expatriate shall be treated as having 
     waived any right to claim any reduction under any treaty with 
     the United States in withholding on any distribution to which 
     paragraph (1)(A) applies.
       ``(g) Definitions and Special Rules Relating to 
     Expatriation.--For purposes of this section--
       ``(1) Covered expatriate.--
       ``(A) In general.--The term `covered expatriate' means an 
     expatriate who meets the requirements of subparagraph (A), 
     (B), or (C) of section 877(a)(2).
       ``(B) Exceptions.--An individual shall not be treated as 
     meeting the requirements of subparagraph (A) or (B) of 
     section 877(a)(2) if--
       ``(i) the individual--

       ``(I) became at birth a citizen of the United States and a 
     citizen of another country and, as of the expatriation date, 
     continues to be a citizen of, and is taxed as a resident of, 
     such other country, and
       ``(II) has been a resident of the United States (as defined 
     in section 7701(b)(1)(A)(ii)) for not more than 10 taxable 
     years during the 15-taxable year period ending with the 
     taxable year during which the expatriation date occurs, or

       ``(ii)(I) the individual's relinquishment of United States 
     citizenship occurs before such individual attains age 18\1/
     2\, and
       ``(II) the individual has been a resident of the United 
     States (as so defined) for not more than 10 taxable years 
     before the date of relinquishment.
       ``(2) Expatriate.--The term `expatriate' means--
       ``(A) any United States citizen who relinquishes his 
     citizenship, and
       ``(B) any long-term resident of the United States who 
     ceases to be a lawful permanent resident of the United States 
     (within the meaning of section 7701(b)(6)).
       ``(3) Expatriation date.--The term `expatriation date' 
     means--
       ``(A) the date an individual relinquishes United States 
     citizenship, or
       ``(B) in the case of a long-term resident of the United 
     States, the date on which the individual ceases to be a 
     lawful permanent resident of the United States (within the 
     meaning of section 7701(b)(6)).
       ``(4) Relinquishment of citizenship.--A citizen shall be 
     treated as relinquishing his United States citizenship on the 
     earliest of--
       ``(A) the date the individual renounces his United States 
     nationality before a diplomatic or consular officer of the 
     United States pursuant to paragraph (5) of section 349(a) of 
     the Immigration and Nationality Act (8 U.S.C. 1481(a)(5)),
       ``(B) the date the individual furnishes to the United 
     States Department of State a signed statement of voluntary 
     relinquishment of United States nationality confirming the 
     performance of an act of expatriation specified in paragraph 
     (1), (2), (3), or (4) of section 349(a) of the Immigration 
     and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),
       ``(C) the date the United States Department of State issues 
     to the individual a certificate of loss of nationality, or
       ``(D) the date a court of the United States cancels a 
     naturalized citizen's certificate of naturalization.

     Subparagraph (A) or (B) shall not apply to any individual 
     unless the renunciation or voluntary relinquishment is 
     subsequently approved by the issuance to the individual of a 
     certificate of loss of nationality by the United States 
     Department of State.
       ``(5) Long-term resident.--The term `long-term resident' 
     has the meaning given to such term by section 877(e)(2).
       ``(6) Early distribution tax.--The term `early distribution 
     tax' means any increase in tax imposed under section 72(t), 
     220(e)(4), 223(f)(4), 409A(a)(1)(B), 529(c)(6), or 530(d)(4).
       ``(h) Other Rules.--
       ``(1) Termination of deferrals, etc.--In the case of any 
     covered expatriate, notwithstanding any other provision of 
     this title--
       ``(A) any time period for acquiring property which would 
     result in the reduction in the amount of gain recognized with 
     respect to property disposed of by the taxpayer shall 
     terminate on the day before the expatriation date, and
       ``(B) any extension of time for payment of tax shall cease 
     to apply on the day before the expatriation date and the 
     unpaid portion of such tax shall be due and payable at the 
     time and in the manner prescribed by the Secretary.
       ``(2) Step-up in basis.--Solely for purposes of determining 
     any tax imposed by reason of subsection (a), property which 
     was held by an individual on the date the individual first 
     became a resident of the United States (within the meaning of 
     section 7701(b)) shall be treated as having a basis on such 
     date of not less than the fair market value of such

[[Page 26998]]

     property on such date. The preceding sentence shall not apply 
     if the individual elects not to have such sentence apply. 
     Such an election, once made, shall be irrevocable.
       ``(3) Coordination with section 684.--If the expatriation 
     of any individual would result in the recognition of gain 
     under section 684, this section shall be applied after the 
     application of section 684.
       ``(i) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Tax on Gifts and Bequests Received by United States 
     Citizens and Residents From Expatriates.--
       (1) In general.--Subtitle B (relating to estate and gift 
     taxes) is amended by inserting after chapter 14 the following 
     new chapter:

           ``CHAPTER 15--GIFTS AND BEQUESTS FROM EXPATRIATES

``Sec. 2801. Imposition of tax.

     ``SEC. 2801. IMPOSITION OF TAX.

       ``(a) In General.--If, during any calendar year, any United 
     States citizen or resident receives any covered gift or 
     bequest, there is hereby imposed a tax equal to the product 
     of--
       ``(1) the highest rate of tax specified in the table 
     contained in section 2001(c) as in effect on the date of such 
     receipt (or, if greater, the highest rate of tax specified in 
     the table applicable under section 2502(a) as in effect on 
     the date), and
       ``(2) the value of such covered gift or bequest.
       ``(b) Tax to Be Paid by Recipient.--The tax imposed by 
     subsection (a) on any covered gift or bequest shall be paid 
     by the person receiving such gift or bequest.
       ``(c) Exception for Certain Gifts.--Subsection (a) shall 
     apply only to the extent that the value of covered gifts and 
     bequests received by any person during the calendar year 
     exceeds $10,000.
       ``(d) Tax Reduced by Foreign Gift or Estate Tax.--The tax 
     imposed by subsection (a) on any covered gift or bequest 
     shall be reduced by the amount of any gift or estate tax paid 
     to a foreign country with respect to such covered gift or 
     bequest.
       ``(e) Covered Gift or Bequest.--
       ``(1) In general.--For purposes of this chapter, the term 
     `covered gift or bequest' means--
       ``(A) any property acquired by gift directly or indirectly 
     from an individual who, at the time of such acquisition, was 
     a covered expatriate, and
       ``(B) any property acquired directly or indirectly by 
     reason of the death of an individual who was a covered 
     expatriate.
       ``(2) Exceptions for transfers otherwise subject to estate 
     or gift tax.--Such term shall not include--
       ``(A) any property shown on a timely filed return of tax 
     imposed by chapter 12 which is a taxable gift by the covered 
     expatriate, and
       ``(B) any property included in the gross estate of the 
     covered expatriate for purposes of chapter 11 and shown on a 
     timely filed return of tax imposed by chapter 11 of the 
     estate of the covered expatriate.
       ``(3) Transfers in trust.--
       ``(A) Domestic trusts.--In the case of a covered gift or 
     bequest made to a domestic trust--
       ``(i) subsection (a) shall apply in the same manner as if 
     such trust were a United States citizen, and
       ``(ii) the tax imposed by subsection (a) on such gift or 
     bequest shall be paid by such trust.
       ``(B) Foreign trusts.--
       ``(i) In general.--In the case of a covered gift or bequest 
     made to a foreign trust, subsection (a) shall apply to any 
     distribution attributable to such gift or bequest from such 
     trust (whether from income or corpus) to a United States 
     citizen or resident in the same manner as if such 
     distribution were a covered gift or bequest.
       ``(ii) Deduction for tax paid by recipient.--There shall be 
     allowed as a deduction under section 164 the amount of tax 
     imposed by this section which is paid or accrued by a United 
     States citizen or resident by reason of a distribution from a 
     foreign trust, but only to the extent such tax is imposed on 
     the portion of such distribution which is included in the 
     gross income of such citizen or resident.
       ``(iii) Election to be treated as domestic trust.--Solely 
     for purposes of this section, a foreign trust may elect to be 
     treated as a domestic trust. Such an election may be revoked 
     with the consent of the Secretary.
       ``(f) Covered Expatriate.--For purposes of this section, 
     the term `covered expatriate' has the meaning given to such 
     term by section 877A(g)(1).''.
       (2) Clerical amendment.--The table of chapters for subtitle 
     B is amended by inserting after the item relating to chapter 
     13 the following new item:

         ``Chapter 15. Gifts and Bequests From Expatriates.''.

       (c) Definition of Termination of United States 
     Citizenship.--
       (1) In general.--Section 7701(a) is amended by adding at 
     the end the following new paragraph:
       ``(50) Termination of united states citizenship.--
       ``(A) In general.--An individual shall not cease to be 
     treated as a United States citizen before the date on which 
     the individual's citizenship is treated as relinquished under 
     section 877A(g)(4).
       ``(B) Dual citizens.--Under regulations prescribed by the 
     Secretary, subparagraph (A) shall not apply to an individual 
     who became at birth a citizen of the United States and a 
     citizen of another country.''.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 877(e) is amended to read as 
     follows:
       ``(1) In general.--Any long-term resident of the United 
     States who ceases to be a lawful permanent resident of the 
     United States (within the meaning of section 7701(b)(6)) 
     shall be treated for purposes of this section and sections 
     2107, 2501, and 6039G in the same manner as if such resident 
     were a citizen of the United States who lost United States 
     citizenship on the date of such cessation or commencement.''.
       (B) Paragraph (6) of section 7701(b) is amended by adding 
     at the end the following flush sentence:

     ``An individual shall cease to be treated as a lawful 
     permanent resident of the United States if such individual 
     commences to be treated as a resident of a foreign country 
     under the provisions of a tax treaty between the United 
     States and the foreign country, does not waive the benefits 
     of such treaty applicable to residents of the foreign 
     country, and notifies the Secretary of the commencement of 
     such treatment.''.
       (C) Section 7701 is amended by striking subsection (n) and 
     by redesignating subsections (o) and (p) as subsections (n) 
     and (o), respectively.
       (d) Information Returns.--Section 6039G is amended--
       (1) by inserting ``or 877A'' after ``section 877(b)'' in 
     subsection (a), and
       (2) by inserting ``or 877A'' after ``section 877(a)'' in 
     subsection (d).
       (e) Clerical Amendment.--The table of sections for subpart 
     A of part II of subchapter N of chapter 1 is amended by 
     inserting after the item relating to section 877 the 
     following new item:

``Sec. 877A. Tax responsibilities of expatriation.''.

       (f) Effective Date.--
       (1) In general.--Except as provided in this subsection, the 
     amendments made by this section shall apply to expatriates 
     (as defined in section 877A(g) of the Internal Revenue Code 
     of 1986, as added by this section) whose expatriation date 
     (as so defined) is on or after the date of the enactment of 
     this Act.
       (2) Gifts and bequests.--Chapter 15 of the Internal Revenue 
     Code of 1986 (as added by subsection (b)) shall apply to 
     covered gifts and bequests (as defined in section 2801 of 
     such Code, as so added) received on or after the date of the 
     enactment of this Act, regardless of when the transferor 
     expatriated.

     SEC. 6. REPEAL OF SUSPENSION OF CERTAIN PENALTIES AND 
                   INTEREST.

       (a) In General.--Section 6404 is amended by striking 
     subsection (g) and by redesignating subsection (h) as 
     subsection (g).
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to notices provided by the Secretary of the 
     Treasury, or his delegate, after the date which is 6 months 
     after the date of the enactment of the Small Business and 
     Work Opportunity Tax Act of 2007.

     SEC. 7. INCREASE IN INFORMATION RETURN PENALTIES.

       (a) Failure to File Correct Information Returns.--
       (1) In general.--Subsections (a)(1), (b)(1)(A), and 
     (b)(2)(A) of section 6721 are each amended by striking 
     ``$50'' and inserting ``$100''.
       (2) Aggregate annual limitation.--Subsections (a)(1), 
     (d)(1)(A), and (e)(3)(A) of section 6721 are each amended by 
     striking ``$250,000'' and inserting ``$600,000''.
       (b) Reduction Where Correction Within 30 Days.--
       (1) In general.--Subparagraph (A) of section 6721(b)(1) is 
     amended by striking ``$15'' and inserting ``$25''.
       (2) Aggregate annual limitation.--Subsections (b)(1)(B) and 
     (d)(1)(B) of section 6721 are each amended by striking 
     ``$75,000'' and inserting ``$200,000''.
       (c) Reduction Where Correction on or Before August 1.--
       (1) In general.--Subparagraph (A) of section 6721(b)(2) is 
     amended by striking ``$30'' and inserting ``$60''.
       (2) Aggregate annual limitation.--Subsections (b)(2)(B) and 
     (d)(1)(C) of section 6721 are each amended by striking 
     ``$150,000'' and inserting ``$400,000''.
       (d) Aggregate Annual Limitations for Persons With Gross 
     Receipts of Not More Than $5,000,000.--Paragraph (1) of 
     section 6721(d) is amended--
       (1) by striking ``$100,000'' in subparagraph (A) and 
     inserting ``$250,000'',
       (2) by striking ``$25,000'' in subparagraph (B) and 
     inserting ``$75,000'', and
       (3) by striking ``$50,000'' in subparagraph (C) and 
     inserting ``$150,000''.
       (e) Penalty in Case of Intentional Disregard.--Paragraph 
     (2) of section 6721(e) is amended by striking ``$100'' and 
     inserting ``$250''.
       (f) Failure to Furnish Correct Payee Statements.--
       (1) In general.--Subsection (a) of section 6722 is amended 
     by striking ``$50'' and inserting ``$100''.

[[Page 26999]]

       (2) Aggregate annual limitation.--Subsections (a) and 
     (c)(2)(A) of section 6722 are each amended by striking 
     ``$100,000'' and inserting ``$600,000''.
       (3) Penalty in case of intentional disregard.--Paragraph 
     (1) of section 6722(c) is amended by striking ``$100'' and 
     inserting ``$250''.
       (g) Failure To Comply With Other Information Reporting 
     Requirements.--Section 6723 is amended--
       (1) by striking ``$50'' and inserting ``$100'', and
       (2) by striking ``$100,000'' and inserting ``$600,000''.
       (h) Effective Date.--The amendments made by this section 
     shall apply with respect to information returns required to 
     be filed on or after January 1, 2008.

     SEC. 8. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

       Subparagraph (B) of section 401(1) of the Tax Increase 
     Prevention and Reconciliation Act of 2005 is amended by 
     striking ``114.50 percent'' and inserting ``114.75 percent''.

  The SPEAKER pro tempore. Pursuant to House Resolution 719, the 
amendment in the nature of a substitute printed in the bill, modified 
by the amendment printed in House Report 110-368, is adopted and the 
bill, as amended, is considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 3056

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

     SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF 
                   CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Tax 
     Collection Responsibility Act of 2007''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; amendment of 1986 Code; table of contents.
Sec. 2. Repeal of authority to enter into private debt collection 
              contracts.
Sec. 3. Delay of application of withholding requirement on certain 
              governmental payments for goods and services.
Sec. 4. Clarification of entitlement of Virgin Islands residents to 
              protections of limitations on assessment and collection 
              of tax.
Sec. 5. Revision of tax rules on expatriation.
Sec. 6. Repeal of suspension of certain penalties and interest.
Sec. 7. Increase in information return penalties.
Sec. 8. Time for payment of corporate estimated taxes.

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

       (a) In General.--Subchapter A of chapter 64 is amended by 
     striking section 6306.
       (b) Conforming Amendments.--
       (1) Subchapter B of chapter 76 is amended by striking 
     section 7433A.
       (2) Section 7811 is amended by striking subsection (g).
       (3) Section 1203 of the Internal Revenue Service 
     Restructuring Act of 1998 is amended by striking subsection 
     (e).
       (4) The table of sections for subchapter A of chapter 64 is 
     amended by striking the item relating to section 6306.
       (5) The table of sections for subchapter B of chapter 76 is 
     amended by striking the item relating to section 7433A.
       (c) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall take 
     effect on the date of the enactment of this Act.
       (2) Exception for existing contracts, etc.--The amendments 
     made by this section shall not apply to any contract which 
     was entered into before July 18, 2007, and is not renewed or 
     extended on or after such date.
       (3) Unauthorized contracts and extensions treated as 
     void.--Any qualified tax collection contract (as defined in 
     section 6306 of the Internal Revenue Code of 1986, as in 
     effect before its repeal) which is entered into on or after 
     July 18, 2007, and any extension or renewal on or after such 
     date of any qualified tax collection contract (as so defined) 
     shall be void.

     SEC. 3. DELAY OF APPLICATION OF WITHHOLDING REQUIREMENT ON 
                   CERTAIN GOVERNMENTAL PAYMENTS FOR GOODS AND 
                   SERVICES.

       (a) In General.--Subsection (b) of section 511 of the Tax 
     Increase Prevention and Reconciliation Act of 2005 is amended 
     by striking ``December 31, 2010'' and inserting ``December 
     31, 2011''.
       (b) Report to Congress.--Not later than 6 months after the 
     date of the enactment of this Act, the Secretary of the 
     Treasury shall submit to the Committee on Ways and Means of 
     the House of Representatives and the Committee on Finance of 
     the Senate a report with respect to the withholding 
     requirements of section 3402(t) of the Internal Revenue Code 
     of 1986, including a detailed analysis of--
       (1) the problems, if any, which are anticipated in 
     administering and complying with such requirements,
       (2) the burdens, if any, that such requirements will place 
     on governments and businesses (taking into account such 
     mechanisms as may be necessary to administer such 
     requirements), and
       (3) the application of such requirements to small 
     expenditures for services and goods by governments.

     SEC. 4. CLARIFICATION OF ENTITLEMENT OF VIRGIN ISLANDS 
                   RESIDENTS TO PROTECTIONS OF LIMITATIONS ON 
                   ASSESSMENT AND COLLECTION OF TAX.

       (a) In General.--Subsection (c) of section 932 (relating to 
     treatment of Virgin Islands residents) is amended by adding 
     at the end the following new paragraph:
       ``(5) Treatment of income tax return filed with virgin 
     islands.--An income tax return filed with the Virgin Islands 
     by an individual claiming to be described in paragraph (1) 
     for the taxable year shall be treated for purposes of 
     subtitle F in the same manner as if such return were an 
     income tax return filed with the United States for such 
     taxable year. The preceding sentence shall not apply where 
     such return is false or fraudulent with the intent to avoid 
     tax or otherwise is a willful attempt in any manner to defeat 
     or evade tax.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after 1986.

     SEC. 5. REVISION OF TAX RULES ON EXPATRIATION.

       (a) In General.--Subpart A of part II of subchapter N of 
     chapter 1 is amended by inserting after section 877 the 
     following new section:

     ``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

       ``(a) General Rules.--For purposes of this subtitle--
       ``(1) Mark to market.--All property of a covered expatriate 
     shall be treated as sold on the day before the expatriation 
     date for its fair market value.
       ``(2) Recognition of gain or loss.--In the case of any sale 
     under paragraph (1)--
       ``(A) notwithstanding any other provision of this title, 
     any gain arising from such sale shall be taken into account 
     for the taxable year of the sale, and
       ``(B) any loss arising from such sale shall be taken into 
     account for the taxable year of the sale to the extent 
     otherwise provided by this title, except that section 1091 
     shall not apply to any such loss.

     Proper adjustment shall be made in the amount of any gain or 
     loss subsequently realized for gain or loss taken into 
     account under the preceding sentence, determined without 
     regard to paragraph (3).
       ``(3) Exclusion for certain gain.--
       ``(A) In general.--The amount which would (but for this 
     paragraph) be includible in the gross income of any 
     individual by reason of paragraph (1) shall be reduced (but 
     not below zero) by $600,000.
       ``(B) Adjustment for inflation.--
       ``(i) In general.--In the case of any taxable year 
     beginning in a calendar year after 2008, the dollar amount in 
     subparagraph (A) shall be increased by an amount equal to--

       ``(I) such dollar amount, multiplied by
       ``(II) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, by substituting `calendar year 2007' for 
     `calendar year 1992' in subparagraph (B) thereof.

       ``(ii) Rounding.--If any amount as adjusted under clause 
     (i) is not a multiple of $1,000, such amount shall be rounded 
     to the nearest multiple of $1,000.
       ``(b) Election To Defer Tax.--
       ``(1) In general.--If the taxpayer elects the application 
     of this subsection with respect to any property treated as 
     sold by reason of subsection (a), the time for payment of the 
     additional tax attributable to such property shall be 
     extended until the due date of the return for the taxable 
     year in which such property is disposed of (or, in the case 
     of property disposed of in a transaction in which gain is not 
     recognized in whole or in part, until such other date as the 
     Secretary may prescribe).
       ``(2) Determination of tax with respect to property.--For 
     purposes of paragraph (1), the additional tax attributable to 
     any property is an amount which bears the same ratio to the 
     additional tax imposed by this chapter for the taxable year 
     solely by reason of subsection (a) as the gain taken into 
     account under subsection (a) with respect to such property 
     bears to the total gain taken into account under subsection 
     (a) with respect to all property to which subsection (a) 
     applies.
       ``(3) Termination of extension.--The due date for payment 
     of tax may not be extended under this subsection later than 
     the due date for the return of tax imposed by this chapter 
     for the taxable year which includes the date of death of the 
     expatriate (or, if earlier, the time that the security 
     provided with respect to the property fails to meet the 
     requirements of paragraph (4), unless the taxpayer corrects 
     such failure within the time specified by the Secretary).
       ``(4) Security.--
       ``(A) In general.--No election may be made under paragraph 
     (1) with respect to any property unless adequate security is 
     provided with respect to such property.
       ``(B) Adequate security.--For purposes of subparagraph (A), 
     security with respect to any property shall be treated as 
     adequate security if--
       ``(i) it is a bond which is furnished to, and accepted by, 
     the Secretary, which is conditioned

[[Page 27000]]

     on the payment of tax (and interest thereon), and which meets 
     the requirements of section 6325, or
       ``(ii) it is another form of security for such payment 
     (including letters of credit) that meets such requirements as 
     the Secretary may prescribe.
       ``(5) Waiver of certain rights.--No election may be made 
     under paragraph (1) unless the taxpayer makes an irrevocable 
     waiver of any right under any treaty of the United States 
     which would preclude assessment or collection of any tax 
     imposed by reason of this section.
       ``(6) Elections.--An election under paragraph (1) shall 
     only apply to property described in the election and, once 
     made, is irrevocable.
       ``(7) Interest.--For purposes of section 6601, the last 
     date for the payment of tax shall be determined without 
     regard to the election under this subsection.
       ``(c) Exception for Certain Property.--Subsection (a) shall 
     not apply to--
       ``(1) any deferred compensation item (as defined in 
     subsection (d)(4)),
       ``(2) any specified tax deferred account (as defined in 
     subsection (e)(2)), and
       ``(3) any interest in a nongrantor trust (as defined in 
     subsection (f)(3)).
       ``(d) Treatment of Deferred Compensation Items.--
       ``(1) Withholding on eligible deferred compensation 
     items.--
       ``(A) In general.--In the case of any eligible deferred 
     compensation item, the payor shall deduct and withhold from 
     any taxable payment to a covered expatriate with respect to 
     such item a tax equal to 30 percent thereof.
       ``(B) Taxable payment.--For purposes of subparagraph (A), 
     the term `taxable payment' means with respect to a covered 
     expatriate any payment to the extent it would be includible 
     in the gross income of the covered expatriate if such 
     expatriate continued to be subject to tax as a citizen or 
     resident of the United States. A deferred compensation item 
     shall be taken into account as a payment under the preceding 
     sentence when such item would be so includible.
       ``(2) Other deferred compensation items.--In the case of 
     any deferred compensation item which is not an eligible 
     deferred compensation item--
       ``(A)(i) with respect to any deferred compensation item to 
     which clause (ii) does not apply, an amount equal to the 
     present value of the covered expatriate's accrued benefit 
     shall be treated as having been received by such individual 
     on the day before the expatriation date as a distribution 
     under the plan, and
       ``(ii) with respect to any deferred compensation item 
     referred to in paragraph (4)(D), the rights of the covered 
     expatriate to such item shall be treated as becoming 
     transferable and not subject to a substantial risk of 
     forfeiture on the day before the expatriation date,
       ``(B) no early distribution tax shall apply by reason of 
     such treatment, and
       ``(C) appropriate adjustments shall be made to subsequent 
     distributions from the plan to reflect such treatment.
       ``(3) Eligible deferred compensation items.--For purposes 
     of this subsection, the term `eligible deferred compensation 
     item' means any deferred compensation item with respect to 
     which--
       ``(A) the payor of such item is--
       ``(i) a United States person, or
       ``(ii) a person who is not a United States person but who 
     elects to be treated as a United States person for purposes 
     of paragraph (1) and meets such requirements as the Secretary 
     may provide to ensure that the payor will meet the 
     requirements of paragraph (1), and
       ``(B) the covered expatriate--
       ``(i) notifies the payor of his status as a covered 
     expatriate, and
       ``(ii) makes an irrevocable waiver of any right to claim 
     any reduction under any treaty with the United States in 
     withholding on such item.
       ``(4) Deferred compensation item.--For purposes of this 
     subsection, the term `deferred compensation item' means--
       ``(A) any interest in a plan or arrangement described in 
     section 219(g)(5),
       ``(B) any interest in a foreign pension plan or similar 
     retirement arrangement or program,
       ``(C) any item of deferred compensation, and
       ``(D) any property, or right to property, which the 
     individual is entitled to receive in connection with the 
     performance of services to the extent not previously taken 
     into account under section 83 or in accordance with section 
     83.
       ``(5) Exception.--Paragraphs (1) and (2) shall not apply to 
     any deferred compensation item which is attributable to 
     services performed outside the United States while the 
     covered expatriate was not a citizen or resident of the 
     United States.
       ``(6) Special rules.--
       ``(A) Application of withholding rules.--Rules similar to 
     the rules of subchapter B of chapter 3 shall apply for 
     purposes of this subsection.
       ``(B) Application of tax.--Any item subject to the 
     withholding tax imposed under paragraph (1) shall be subject 
     to tax under section 871.
       ``(C) Coordination with other withholding requirements.--
     Any item subject to withholding under paragraph (1) shall not 
     be subject to withholding under section 1441 or chapter 24.
       ``(e) Treatment of Specified Tax Deferred Accounts.--
       ``(1) Account treated as distributed.--In the case of any 
     interest in a specified tax deferred account held by a 
     covered expatriate on the day before the expatriation date--
       ``(A) the covered expatriate shall be treated as receiving 
     a distribution of his entire interest in such account on the 
     day before the expatriation date,
       ``(B) no early distribution tax shall apply by reason of 
     such treatment, and
       ``(C) appropriate adjustments shall be made to subsequent 
     distributions from the account to reflect such treatment.
       ``(2) Specified tax deferred account.--For purposes of 
     paragraph (1), the term `specified tax deferred account' 
     means an individual retirement plan (as defined in section 
     7701(a)(37)) other than any arrangement described in 
     subsection (k) or (p) of section 408, a qualified tuition 
     program (as defined in section 529), a Coverdell education 
     savings account (as defined in section 530), a health savings 
     account (as defined in section 223), and an Archer MSA (as 
     defined in section 220).
       ``(f) Special Rules for Nongrantor Trusts.--
       ``(1) In general.--In the case of a distribution (directly 
     or indirectly) of any property from a nongrantor trust to a 
     covered expatriate--
       ``(A) the trustee shall deduct and withhold from such 
     distribution an amount equal to 30 percent of the taxable 
     portion of the distribution, and
       ``(B) if the fair market value of such property exceeds its 
     adjusted basis in the hands of the trust, gain shall be 
     recognized to the trust as if such property were sold to the 
     expatriate at its fair market value.
       ``(2) Taxable portion.--For purposes of this subsection, 
     the term `taxable portion' means, with respect to any 
     distribution, that portion of the distribution which would be 
     includible in the gross income of the covered expatriate if 
     such expatriate continued to be subject to tax as a citizen 
     or resident of the United States.
       ``(3) Nongrantor trust.--For purposes of this subsection, 
     the term `nongrantor trust' means the portion of any trust 
     that the individual is not considered the owner of under 
     subpart E of part I of subchapter J. The determination under 
     the preceding sentence shall be made immediately before the 
     expatriation date.
       ``(4) Special rules relating to withholding.--For purposes 
     of this subsection--
       ``(A) rules similar to the rules of subsection (d)(6) shall 
     apply, and
       ``(B) the covered expatriate shall be treated as having 
     waived any right to claim any reduction under any treaty with 
     the United States in withholding on any distribution to which 
     paragraph (1)(A) applies.
       ``(g) Definitions and Special Rules Relating to 
     Expatriation.--For purposes of this section--
       ``(1) Covered expatriate.--
       ``(A) In general.--The term `covered expatriate' means an 
     expatriate who meets the requirements of subparagraph (A), 
     (B), or (C) of section 877(a)(2).
       ``(B) Exceptions.--An individual shall not be treated as 
     meeting the requirements of subparagraph (A) or (B) of 
     section 877(a)(2) if--
       ``(i) the individual--

       ``(I) became at birth a citizen of the United States and a 
     citizen of another country and, as of the expatriation date, 
     continues to be a citizen of, and is taxed as a resident of, 
     such other country, and
       ``(II) has been a resident of the United States (as defined 
     in section 7701(b)(1)(A)(ii)) for not more than 10 taxable 
     years during the 15-taxable year period ending with the 
     taxable year during which the expatriation date occurs, or

       ``(ii)(I) the individual's relinquishment of United States 
     citizenship occurs before such individual attains age 18\1/
     2\, and
       ``(II) the individual has been a resident of the United 
     States (as so defined) for not more than 10 taxable years 
     before the date of relinquishment.
       ``(C) Covered expatriates also subject to tax as citizens 
     or residents.--In the case of any covered expatriate who is 
     subject to tax as a citizen or resident of the United States 
     for any period beginning after the expatriation date, such 
     individual shall not be treated as a covered expatriate 
     during such period for purposes of subsections (d)(1) and (f) 
     and section 2801.
       ``(2) Expatriate.--The term `expatriate' means--
       ``(A) any United States citizen who relinquishes his 
     citizenship, and
       ``(B) any long-term resident of the United States who 
     ceases to be a lawful permanent resident of the United States 
     (within the meaning of section 7701(b)(6)).
       ``(3) Expatriation date.--The term `expatriation date' 
     means--
       ``(A) the date an individual relinquishes United States 
     citizenship, or
       ``(B) in the case of a long-term resident of the United 
     States, the date on which the individual ceases to be a 
     lawful permanent resident of the United States (within the 
     meaning of section 7701(b)(6)).
       ``(4) Relinquishment of citizenship.--A citizen shall be 
     treated as relinquishing his United States citizenship on the 
     earliest of--
       ``(A) the date the individual renounces his United States 
     nationality before a diplomatic or consular officer of the 
     United States pursuant to paragraph (5) of section 349(a) of 
     the Immigration and Nationality Act (8 U.S.C. 1481(a)(5)),
       ``(B) the date the individual furnishes to the United 
     States Department of State a signed statement of voluntary 
     relinquishment of United States nationality confirming the 
     performance of an act of expatriation specified in paragraph 
     (1), (2), (3), or (4) of section 349(a) of the Immigration 
     and Nationality Act (8 U.S.C. 1481(a)(1)-(4)),

[[Page 27001]]

       ``(C) the date the United States Department of State issues 
     to the individual a certificate of loss of nationality, or
       ``(D) the date a court of the United States cancels a 
     naturalized citizen's certificate of naturalization.

     Subparagraph (A) or (B) shall not apply to any individual 
     unless the renunciation or voluntary relinquishment is 
     subsequently approved by the issuance to the individual of a 
     certificate of loss of nationality by the United States 
     Department of State.
       ``(5) Long-term resident.--The term `long-term resident' 
     has the meaning given to such term by section 877(e)(2).
       ``(6) Early distribution tax.--The term `early distribution 
     tax' means any increase in tax imposed under section 72(t), 
     220(e)(4), 223(f)(4), 409A(a)(1)(B), 529(c)(6), or 530(d)(4).
       ``(h) Other Rules.--
       ``(1) Termination of deferrals, etc.--In the case of any 
     covered expatriate, notwithstanding any other provision of 
     this title--
       ``(A) any time period for acquiring property which would 
     result in the reduction in the amount of gain recognized with 
     respect to property disposed of by the taxpayer shall 
     terminate on the day before the expatriation date, and
       ``(B) any extension of time for payment of tax shall cease 
     to apply on the day before the expatriation date and the 
     unpaid portion of such tax shall be due and payable at the 
     time and in the manner prescribed by the Secretary.
       ``(2) Step-up in basis.--Solely for purposes of determining 
     any tax imposed by reason of subsection (a), property which 
     was held by an individual on the date the individual first 
     became a resident of the United States (within the meaning of 
     section 7701(b)) shall be treated as having a basis on such 
     date of not less than the fair market value of such property 
     on such date. The preceding sentence shall not apply if the 
     individual elects not to have such sentence apply. Such an 
     election, once made, shall be irrevocable.
       ``(3) Coordination with section 684.--If the expatriation 
     of any individual would result in the recognition of gain 
     under section 684, this section shall be applied after the 
     application of section 684.
       ``(i) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section.''.
       (b) Tax on Gifts and Bequests Received by United States 
     Citizens and Residents From Expatriates.--
       (1) In general.--Subtitle B (relating to estate and gift 
     taxes) is amended by inserting after chapter 14 the following 
     new chapter:

           ``CHAPTER 15--GIFTS AND BEQUESTS FROM EXPATRIATES

``Sec. 2801. Imposition of tax.

     ``SEC. 2801. IMPOSITION OF TAX.

       ``(a) In General.--If, during any calendar year, any United 
     States citizen or resident receives any covered gift or 
     bequest, there is hereby imposed a tax equal to the product 
     of--
       ``(1) the highest rate of tax specified in the table 
     contained in section 2001(c) as in effect on the date of such 
     receipt (or, if greater, the highest rate of tax specified in 
     the table applicable under section 2502(a) as in effect on 
     the date), and
       ``(2) the value of such covered gift or bequest.
       ``(b) Tax To Be Paid by Recipient.--The tax imposed by 
     subsection (a) on any covered gift or bequest shall be paid 
     by the person receiving such gift or bequest.
       ``(c) Exception for Certain Gifts.--Subsection (a) shall 
     apply only to the extent that the value of covered gifts and 
     bequests received by any person during the calendar year 
     exceeds $10,000.
       ``(d) Tax Reduced by Foreign Gift or Estate Tax.--The tax 
     imposed by subsection (a) on any covered gift or bequest 
     shall be reduced by the amount of any gift or estate tax paid 
     to a foreign country with respect to such covered gift or 
     bequest.
       ``(e) Covered Gift or Bequest.--
       ``(1) In general.--For purposes of this chapter, the term 
     `covered gift or bequest' means--
       ``(A) any property acquired by gift directly or indirectly 
     from an individual who, at the time of such acquisition, is a 
     covered expatriate, and
       ``(B) any property acquired directly or indirectly by 
     reason of the death of an individual who, immediately before 
     such death, was a covered expatriate.
       ``(2) Exceptions for transfers otherwise subject to estate 
     or gift tax.--Such term shall not include--
       ``(A) any property shown on a timely filed return of tax 
     imposed by chapter 12 which is a taxable gift by the covered 
     expatriate, and
       ``(B) any property included in the gross estate of the 
     covered expatriate for purposes of chapter 11 and shown on a 
     timely filed return of tax imposed by chapter 11 of the 
     estate of the covered expatriate.
       ``(3) Transfers in trust.--
       ``(A) Domestic trusts.--In the case of a covered gift or 
     bequest made to a domestic trust--
       ``(i) subsection (a) shall apply in the same manner as if 
     such trust were a United States citizen, and
       ``(ii) the tax imposed by subsection (a) on such gift or 
     bequest shall be paid by such trust.
       ``(B) Foreign trusts.--
       ``(i) In general.--In the case of a covered gift or bequest 
     made to a foreign trust, subsection (a) shall apply to any 
     distribution attributable to such gift or bequest from such 
     trust (whether from income or corpus) to a United States 
     citizen or resident in the same manner as if such 
     distribution were a covered gift or bequest.
       ``(ii) Deduction for tax paid by recipient.--There shall be 
     allowed as a deduction under section 164 the amount of tax 
     imposed by this section which is paid or accrued by a United 
     States citizen or resident by reason of a distribution from a 
     foreign trust, but only to the extent such tax is imposed on 
     the portion of such distribution which is included in the 
     gross income of such citizen or resident.
       ``(iii) Election to be treated as domestic trust.--Solely 
     for purposes of this section, a foreign trust may elect to be 
     treated as a domestic trust. Such an election may be revoked 
     with the consent of the Secretary.
       ``(f) Covered Expatriate.--For purposes of this section, 
     the term `covered expatriate' has the meaning given to such 
     term by section 877A(g)(1).''.
       (2) Clerical amendment.--The table of chapters for subtitle 
     B is amended by inserting after the item relating to chapter 
     14 the following new item:

         ``Chapter 15. Gifts and Bequests From Expatriates.''.

       (c) Definition of Termination of United States 
     Citizenship.--
       (1) In general.--Section 7701(a) is amended by adding at 
     the end the following new paragraph:
       ``(50) Termination of united states citizenship.--
       ``(A) In general.--An individual shall not cease to be 
     treated as a United States citizen before the date on which 
     the individual's citizenship is treated as relinquished under 
     section 877A(g)(4).
       ``(B) Dual citizens.--Under regulations prescribed by the 
     Secretary, subparagraph (A) shall not apply to an individual 
     who became at birth a citizen of the United States and a 
     citizen of another country.''.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 877(e) is amended to read as 
     follows:
       ``(1) In general.--Any long-term resident of the United 
     States who ceases to be a lawful permanent resident of the 
     United States (within the meaning of section 7701(b)(6)) 
     shall be treated for purposes of this section and sections 
     2107, 2501, and 6039G in the same manner as if such resident 
     were a citizen of the United States who lost United States 
     citizenship on the date of such cessation or commencement.''.
       (B) Paragraph (6) of section 7701(b) is amended by adding 
     at the end the following flush sentence:

     ``An individual shall cease to be treated as a lawful 
     permanent resident of the United States if such individual 
     commences to be treated as a resident of a foreign country 
     under the provisions of a tax treaty between the United 
     States and the foreign country, does not waive the benefits 
     of such treaty applicable to residents of the foreign 
     country, and notifies the Secretary of the commencement of 
     such treatment.''.
       (C) Section 7701 is amended by striking subsection (n) and 
     by redesignating subsections (o) and (p) as subsections (n) 
     and (o), respectively.
       (d) Information Returns.--Section 6039G is amended--
       (1) by inserting ``or 877A'' after ``section 877(b)'' in 
     subsection (a), and
       (2) by inserting ``or 877A'' after ``section 877(a)'' in 
     subsection (d).
       (e) Clerical Amendment.--The table of sections for subpart 
     A of part II of subchapter N of chapter 1 is amended by 
     inserting after the item relating to section 877 the 
     following new item:

``Sec. 877A. Tax responsibilities of expatriation.''.

       (f) Effective Date.--
       (1) In general.--Except as provided in this subsection, the 
     amendments made by this section shall apply to expatriates 
     (as defined in section 877A(g) of the Internal Revenue Code 
     of 1986, as added by this section) whose expatriation date 
     (as so defined) is on or after the date of the enactment of 
     this Act.
       (2) Gifts and bequests.--Chapter 15 of the Internal Revenue 
     Code of 1986 (as added by subsection (b)) shall apply to 
     covered gifts and bequests (as defined in section 2801 of 
     such Code, as so added) received on or after the date of the 
     enactment of this Act, regardless of when the transferor 
     expatriated.

     SEC. 6. REPEAL OF SUSPENSION OF CERTAIN PENALTIES AND 
                   INTEREST.

       (a) In General.--Section 6404 is amended by striking 
     subsection (g) and by redesignating subsection (h) as 
     subsection (g).
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to notices provided by the Secretary of the 
     Treasury, or his delegate, after the date which is 6 months 
     after the date of the enactment of the Small Business and 
     Work Opportunity Tax Act of 2007.

     SEC. 7. INCREASE IN INFORMATION RETURN PENALTIES.

       (a) Failure To File Correct Information Returns.--
       (1) In general.--Subsections (a)(1), (b)(1)(A), and 
     (b)(2)(A) of section 6721 are each amended by striking 
     ``$50'' and inserting ``$100''.
       (2) Aggregate annual limitation.--Subsections (a)(1), 
     (d)(1)(A), and (e)(3)(A) of section 6721 are each amended by 
     striking ``$250,000'' and inserting ``$600,000''.
       (b) Reduction Where Correction Within 30 Days.--
       (1) In general.--Subparagraph (A) of section 6721(b)(1) is 
     amended by striking ``$15'' and inserting ``$25''.
       (2) Aggregate annual limitation.--Subsections (b)(1)(B) and 
     (d)(1)(B) of section 6721

[[Page 27002]]

     are each amended by striking ``$75,000'' and inserting 
     ``$200,000''.
       (c) Reduction Where Correction on or Before August 1.--
       (1) In general.--Subparagraph (A) of section 6721(b)(2) is 
     amended by striking ``$30'' and inserting ``$60''.
       (2) Aggregate annual limitation.--Subsections (b)(2)(B) and 
     (d)(1)(C) of section 6721 are each amended by striking 
     ``$150,000'' and inserting ``$400,000''.
       (d) Aggregate Annual Limitations for Persons With Gross 
     Receipts of Not More Than $5,000,000.--Paragraph (1) of 
     section 6721(d) is amended--
       (1) by striking ``$100,000'' in subparagraph (A) and 
     inserting ``$250,000'',
       (2) by striking ``$25,000'' in subparagraph (B) and 
     inserting ``$75,000'', and
       (3) by striking ``$50,000'' in subparagraph (C) and 
     inserting ``$150,000''.
       (e) Penalty in Case of Intentional Disregard.--Paragraph 
     (2) of section 6721(e) is amended by striking ``$100'' and 
     inserting ``$250''.
       (f) Failure To Furnish Correct Payee Statements.--
       (1) In general.--Subsection (a) of section 6722 is amended 
     by striking ``$50'' and inserting ``$100''.
       (2) Aggregate annual limitation.--Subsections (a) and 
     (c)(2)(A) of section 6722 are each amended by striking 
     ``$100,000'' and inserting ``$600,000''.
       (3) Penalty in case of intentional disregard.--Paragraph 
     (1) of section 6722(c) is amended by striking ``$100'' and 
     inserting ``$250''.
       (g) Failure To Comply With Other Information Reporting 
     Requirements.--Section 6723 is amended--
       (1) by striking ``$50'' and inserting ``$100'', and
       (2) by striking ``$100,000'' and inserting ``$600,000''.
       (h) Effective Date.--The amendments made by this section 
     shall apply with respect to information returns required to 
     be filed on or after January 1, 2008.

     SEC. 8. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

       Subparagraph (B) of section 401(1) of the Tax Increase 
     Prevention and Reconciliation Act of 2005 is amended by 
     striking ``115 percent'' and inserting ``115.25 percent''.

  The SPEAKER pro tempore. The gentleman from New York (Mr. Rangel) and 
the gentleman from Louisiana (Mr. McCrery) each will control 30 
minutes.
  The Chair recognizes the gentleman from New York.
  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in strong support of H.R. 3056, the Tax 
Collection Responsibility Act of 2007. The bill has seven provisions 
and is revenue neutral.
  First, the bill will repeal this excursion into private companies 
collecting the debt for the Internal Revenue Service. We've had many 
hearings, and the Internal Revenue Service, on more than one occasion, 
had indicated that, given the resources, they could do a more effective 
job than having to subcontract out to private firms.
  There's nothing magic about privatization. Just saying that it's 
privatized doesn't mean that it's more effective or that you're doing 
the right thing. And I think, in this great country of ours, there is a 
special relationship between the Internal Revenue Service and the 
taxpayer.
  No one would ever like the tax collector, but you do feel a little 
more secure when you know that a public servant is doing his or her 
job, rather than this job being sold out or given out to somebody 
that's income is going to be based on how much taxes they collect 
today.
  No, if you've got to call the office and ask the taxpayer to pay, or 
call his home, let it not be a ride-by-night firm that is just getting 
involved in tax collection of Federal indebtedness. Let it be someone 
that you can trust, let it be a civil servant, and let it be the people 
that, over the years, have done the job, and no good reason has been 
given by anybody as to why they should not continue to do this.
  The only sad thing that you can say about the collection of taxes by 
the IRS is that, admittedly, we never gave them the money; we never 
gave them the resources. But no one can challenge that there's no one 
better trained to do the job than the Internal Revenue Service.
  And then, of course, I want to thank Representative Meek and 
Representative Herger for providing leadership in repealing this 
provision that would address the 3 percent withholding rate on certain 
government payments for goods and service. It didn't look good then; it 
doesn't look good now.
  The bill also provides some equity to our citizens in the Virgin 
Islands to ensure fairness in tax collection there, and eliminates the 
restrictions on the statute of limitations, which means that their 
statute of limitations is our statute of limitations, that we're all 
citizens in this together, and they're not second class in this.
  In addition, of course, we want to say that this bill is revenue 
neutral.
  I ask unanimous consent to yield the remainder of my time to the 
gentleman from North Dakota (Mr. Pomeroy) and give him the opportunity 
to control that time.
  The SPEAKER pro tempore (Mr. Ross). Is there objection to the request 
of the gentleman from New York?
  There was no objection.
  Mr. McCRERY. Mr. Speaker, I yield myself such time as I might 
consume.
  I'm pleased that the chairman and I have forged a good working 
relationship. That relationship has allowed us to work together on 
several important issues, including trade and some tax bills. Just last 
week, for example, I stood on the floor and joined with the vast 
majority of Members on both sides of the aisle to approve a bill 
helping relieve homeowners of the tax burden that comes with having a 
mortgage written down or foreclosed.
  But the chairman and I know that there are times when we will not 
agree, and today is just such an occasion. The central feature of this 
bill is a repeal of a program at the Internal Revenue Service that 
allows the service to contract with private collection agencies, known 
as PCAs, to secure payment of unpaid taxes from individuals who have 
admitted they owe the government money, but simply have not actually 
paid the money.
  It's true, as the majority likes to argue, that the IRS's own 
taxpayer advocate has urged Congress to repeal the PCA program. But 
some of her reasons are a bit suspect. For example, her report 
criticized the use of private collection agencies because, by doing so, 
``the IRS has separated taxpayers from its world class customer 
service.''
  And while I agree that IRS employees are competent, hardworking 
public servants, and I commend them for the job they do, surely the 
person who wrote that did so with tongue firmly planted in cheek. After 
all, how many of us, in conversations with our constituents, have heard 
from them that the IRS is known for their customer service?
  More importantly, though, IRS reviews of the PCA program show that 
customer service satisfaction with those PCA programs is, in fact, very 
high. In their comments on the taxpayer advocate's report, the IRS 
noted that ``of the nearly 19,000 cases assigned to PCAs, only 108 
taxpayers have requested that their accounts be handled by the IRS. 
There have been 31 reported contractual complaints, all of which have 
been reviewed in depth. There have been no instances of fraud or misuse 
of taxpayer information.''
  That record is not surprising, considering the extensive training PCA 
employees receive and the limited information they are provided. That, 
I should point out, stands in sharp contrast to the many documented 
lapses of the IRS in protecting confidential taxpayer information.
  Program opponents often suggest that there is something intrinsic 
about tax collection that should preclude it being contracted out to 
the private sector. This argument is hard to reconcile with a few basic 
facts.
  First, the PCAs are not adjudicating tax liability. They are merely 
helping to ensure the government receives the amounts the individuals 
have already admitted they owe in taxes but have not paid.
  Second, PCAs are used throughout the Federal Government to collect 
unpaid obligations. According to the IRS, since 1982, PCAs have been 
used by various branches of the Federal Government, collecting nearly 
$700 million in fiscal year 2005 alone.
  Third, of the 43 States with a personal income tax, the vast majority 
of those use private agencies to help collect from delinquent 
taxpayers.
  A hearing on this issue showed the members of the committee the skill

[[Page 27003]]

and patience PCA employees use to avoid disclosing any confidential 
taxpayer information.

                              {time}  1600

  In fact, Mr. Speaker, I would urge the PCA program be modified to 
provide these contractors with additional tools that will both improve 
their recovery rate and reduce the possibility of taxpayer confusion 
about the purpose of calls and letters from the PCAs.
  Even though these agencies lack many of the tools of the IRS, such as 
lien and levy, they are successfully collecting millions of dollars in 
unpaid taxes that the IRS has not and very likely would not ever get 
around to collecting.
  The majority will no doubt argue that the cost to the taxpayers would 
be even less if the IRS went after these obligations. But the fact is 
they are not, and any such comparisons are apples to oranges. The IRS 
is currently ill-equipped to engage in the massive outbound call 
operation the PCAs use to collect these obligations.
  In the first year of the program's operation, more than 90,000 cases 
have been placed with the PCAs. More than 7,300 have resulted in full 
payment, and more than 2,600 taxpayers have entered into installment 
agreements. The PCAs have already collected $32 million in gross 
revenue that would not have been collected otherwise, making this a 
tax-gap closing program with a proven track record. The Joint Tax 
Committee estimates that killing this program will result in the loss 
of over $1 billion in revenue over the coming decade.
  Considering the difficulty of meeting the terms of PAYGO, it's rather 
disappointing that the majority would actually find it necessary to 
raise taxes elsewhere in order to terminate a program that is helping 
to close the tax gap. In fact, during committee markup, members of the 
Ways and Means Committee suggested a number of ways to use the money 
that the majority is spending today by killing this program, including 
delaying the implementation of a withholding rule on Federal 
contractors or providing penalty relief to taxpayers who are 
underwithholding their 2007 taxes because they are unaware of the 
coming hit of the AMT, which the majority has yet to pass, but I'm sure 
that we will get around to that. Unfortunately, those amendments were 
rejected on party-line votes in the committee, and, of course, we are 
not being given a chance to vote on those today in this House.
  Mr. Speaker, at this time I yield the balance of my time to Mr. Brady 
and ask unanimous consent that he be allowed to control that time.
  The SPEAKER pro tempore (Mr. Salazar). Without objection, the 
gentleman from Texas (Mr. Brady) will control the time.
  There was no objection.


                             General Leave

  Mr. POMEROY. Mr. Speaker, I ask unanimous consent to give Members 5 
legislative days to revise and extend their remarks on this bill, H.R. 
3056.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from North Dakota?
  There was no objection.
  Mr. POMEROY. Mr. Speaker, I yield myself such time as I may consume.
  We are in a time where there is a complete fascination in this 
administration with contracting out. If you are happy with Blackwater 
in Iraq, then I expect you are perfectly fine with contracting the debt 
collection of IRS debt to private bill collectors. But there are some 
essential facts at issue which should give us pause to reconsider.
  First, the start-up costs. We were told, in testimony by the IRS 
Commissioner, this venture was going to cost about $14 million to get 
up and running. The tab so far, $70 million, five times the anticipated 
cost to begin this venture.
  Now, you might say, well, okay, start-up costs are a little more than 
expected, but how are we doing on receipts now that we have got them 
fully going, collecting these receipts? We don't have a very good story 
on that one either.
  It was anticipated that $46 million to maybe $63 million would be 
collected. Coming in at about half of that anticipation, $32 million 
in. It costs five times more to start and bringing in about half as 
much as advertised.
  Well, okay, $32 million. It still sounds like a lot. Well, not really 
when you consider the fact they have been given 118,000 cases with an 
unpaid debt of $512 million. For the kind of money we have invested, do 
you know what we are getting back? We are getting about a 6 percent 
return from this experiment in private debt collection.
  You might be asking yourself, look, there must be some more efficient 
way to do this. Well, there sure is. Let's fund the IRS, hire, train, 
manage the debt collection. My gosh, if there is one government 
responsibility, it ought to be in making certain that the revenue owed 
is the revenue raised.
  And the statistics show by the IRS themselves that for $1 spent on 
IRS staff collecting debt, you get a 20 to 1 return, $20 back for every 
$1 spent. Private debt collection, the IRS again projecting, at best, 
$4 back for every $1 spent. That's $20 if we hire to $1 spent, $4 if we 
hire to every $1 spent under contracting. And that's their projection.
  Look, at $32 million collected and $70 million spent, we are 
collecting 50 cents for every dollar spent so far. That's pretty bad 
business. If we had spent the $71 million to hire a Federal collection 
staff, we would have already collected $1.4 billion. That is the total 
amount they project over 10 years under this experiment of private debt 
collection.
  I sit on the Ways and Means Committee. And as we considered this 
notion before it became operative, I thought this is the most expensive 
way to do this. It reminded me of that $600 toilet seat that the 
Department of Defense paid for awhile back. I call this a $600 toilet 
seat of tax collection. Well, when you look at it, they have taken $70 
million to build this gold-plated throne and they flushed away $50 
million on this foolish experiment.
  There are many reasons to end this ill-advised endeavor, and the 
speakers we present are going to offer those reasons. But the 
fundamental is it's a matter of dollars and sense, and this don't make 
sense.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BRADY of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  Well, it's appropriate that we talk about a $600 toilet seat because, 
indeed, this bill smells to high heaven.
  The truth of the matter is you will hear a lot of wild claims made on 
the House floor today, but in truth the Joint Taxation Committee, 
Congressional Budget Office, and every other independent agency has 
testified that passing this bill will cost the American taxpayers more 
than $1 billion. It is a testament that this program is working and 
will continue to work to save dollars for the American taxpayer by 
going after those who owe their taxes on behalf of those of us who pay 
our taxes.
  Mr. Speaker, I rise today in strong opposition to H.R. 3056. This 
bill would eliminate a program that is actually making money for the 
government: overdue tax bills collected by qualified private companies 
from people that owe too little for the IRS to use up valuable 
resources in going after them. To date, the IRS has turned over 90,000 
cases worth nearly half a billion dollars. And the dollars add up to 
the tune of $32 million collected since last month, and there's more to 
come. As I said, more than $1 billion over the next decade.
  This is money that is helping to close the tax gap and is revenue 
that the Treasury Department can use to hire more employees. Under the 
program the IRS can retain up to a quarter of the collection to hire 
additional enforcement workers, and already some $5.7 million has been 
designated by the IRS for collection activities and $20 million has 
gone toward deficit reduction. So it is helping reduce the Federal 
deficit.
  Some argue that collection agents have harassed taxpayers. The 
reality is that these agents are held to the same standards as IRS 
employees when it comes to protecting taxpayer rights. As a matter of 
fact, out of 51,000 cases,

[[Page 27004]]

it was testified at our recent Ways and Means Committee hearing there 
were no, zero, violations of taxpayer privacy, zero.
  These companies do face difficulties in finding the correct person, 
as the IRS does not provide the collectors with the taxpayers' last 
known phone numbers. This might be an area to look for reforming, 
rather than killing, this important program.
  Some argue that the IRS could collect the same debts more cheaply if 
they could hire more employees. But the truth of the matter is these 
taxpayers have already been contacted four times by the IRS and they 
have not had luck in collecting them.
  A GAO report in 2004, General Accountability Office, says that these 
private companies can recover $4.60 for every $1 spent while additional 
IRS employees would recover less, would be less efficient in 
recovering.
  The bottom line is that the program is working, taxpayer rights and 
privacy are being protected. The program allows IRS to do what they are 
good at: enforcement of higher profile debts while allowing private 
collection agents who have to be qualified to collect smaller debts 
owed by tens of thousands of taxpayers.
  And private debt collectors aren't a novel idea. Other Federal 
agencies and many States, 40 States, and thousands of local government 
agencies use private agents to collect everything from overdue income 
taxes, alcohol and cigarette taxes, to local property taxes. It's 
working, and it would be a disservice to taxpayers who actually pay 
their taxes on time to discontinue it now.
  The bottom line truly, Mr. Speaker, is are we serious about closing 
the tax gap. Are we serious about collecting the debts that are owed? 
People here tend to always see things in black and white, and you will 
hear this in the debate today. You are either for or against the IRS, 
for or against private debt collectors.
  The truth of the matter is our goal is to collect the taxes the most 
efficient way. It will take a partnership of our IRS employees, who do 
an excellent job, and private debt collectors, who do an excellent job 
in the tougher debts, to collect in order for the taxpayers to truly 
get the dollars that they are owed and this country the dollars that 
are truly owed.
  Mr. Speaker, I reserve the balance of my time.
  Mr. POMEROY. Mr. Speaker, the unrefuted data is that IRS collection 
with IRS staff is five times more efficient in terms of dollars 
received than contracting out. If we are worrying about IRS efficiency, 
do it on the staff model.
  And I might say that their cost estimate about this bill contemplates 
that the IRS would hire no staff, would just forget hiring out 
contractors, hire no staff, and just walk away from them.
  No. We have got a very different notion. We want to take the money we 
are sending to these private bill collectors and hire IRS staff that 
are going to collect on this five-to-one ratio. We have got a much 
better, more efficient model to address this issue of unpaid balances 
owed to the United States.
  Mr. Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. 
Lewis).
  Mr. LEWIS of Georgia. Mr. Speaker, I want to thank my friend for 
yielding.
  Mr. Speaker, I rise today in support of H.R. 3056, the Tax Collection 
Responsibility Act, a bill to eliminate the IRS's private debt 
collection program.
  The private debt collection program is an insult to the American 
taxpayer and our Federal tax system. The collection of taxes is a core 
government function. It is the mission of the IRS.
  The Ways and Means Committee held a hearing on this program, and we 
found that it has no business, no place in the collection of taxes. 
This program violates the public trust.
  Taxpayers trust the IRS with their personal information. When 
taxpayers put information on their tax returns, they expect that the 
IRS will see that information, and only the IRS. Taxpayers do not 
expect their personal information could be given to private debt 
collectors. It should never ever happen.
  Taxpayers have been harassed under this program. Thousands of 
innocent taxpayers are being called on the phone and asked for their 
Social Security numbers. They are afraid that their identity will be 
stolen. In some cases, the calls are never-ending. We found that one 
elderly couple was called 150 times over 30 days. That's not right. 
That's not fair.
  This program targets low-income taxpayers, and these private debt 
collectors have even gone after nursing home residents and military 
personnel serving in Iraq.

                              {time}  1615

  That is unbelievable. Use of private debt collectors erodes the 
Federal tax system, the public trust and the Treasury.
  I say, Mr. Speaker, enough is enough. We must stand with the 
taxpayers, and we must stand up for the IRS employees. Pass this bill 
and end this program.
  Mr. BRADY of Texas. Mr. Speaker, I would point out that the General 
Accountability Office has testified that, in fact, private debt 
collectors are more efficient per dollars than the IRS employees with 
these types of debts, which is what we are comparing. And, again, we 
have IRS employees with the ability to levy liens and fines, they are 
able to compel certain types of taxpayers to pay efficiently, and they 
can go after the larger, more complex cases very well. It is this group 
here that we've had difficulty collecting taxes from in the past that 
these proven tax collectors across 40 States have done such a good job 
collecting. And that is the bottom line; are we going to collect the 
taxes of the American people or not?
  With that, I would yield 2 minutes to the ranking member of the Trade 
Subcommittee, the gentleman from California (Mr. Herger), who has 
worked very hard on behalf of American taxpayers.
  Mr. HERGER. Mr. Speaker, I rise in strong opposition to the Tax 
Collection Responsibility Act. This legislation would unwisely 
eliminate an IRS program which collects otherwise uncollected tax 
debts, refusing as much as $2.2 billion in Federal revenue. In 
addition, this partisan measure does a disservice to the overwhelmingly 
bipartisan effort to repeal the 3 percent withholding burden before it 
takes effect.
  In less than 4 years, 3 percent of all payments made by a government 
to a business or individual providing goods or services will be 
unfairly withheld as a prepayment on taxes. This will needlessly reduce 
cash flows for thousands of small businesses across the U.S. Today's 
bill merely delays 3 percent withholding implementation for 1 year, but 
that does not solve this real and pressing problem.
  What Congress should do is follow the broader proposal my friend 
Kendrick Meek of Florida and I have introduced, repealing this 
withholding tax outright. Pairing a scaled-back 1-year delay with the 
majority's repeal of the private collection agency program wrongly 
splits the bipartisan, broad-based full repeal initiative.
  Mr. Speaker, the Meek-Herger proposal has 219 cosponsors from both 
parties. Further, the closed rule prohibits a Republican substitute 
that would have provided for consideration of the full 3 percent 
withholding repeal alone and on its own merit.
  I urge Members to reject this flawed bill.
  Mr. POMEROY. Mr. Speaker, I yield 2 minutes to the gentleman from 
Oregon (Mr. Blumenauer).
  Mr. BLUMENAUER. I appreciate the gentleman's courtesy.
  Make no mistake, we're talking about uncollected taxes that are 
uncollected because of a systematic effort by this Republican 
administration and a Republican Congress to undermine the ability of 
the IRS to do its job, cranking up the audits on the poorest of 
citizens while stopping the IRS from oversight of those who are more 
wealthy.
  As my good friend from North Dakota pointed out, we're talking about 
a 6 percent rate of return, when the independent officer, who has been 
set up within the IRS to give the independent judgment, has pointed out 
that this

[[Page 27005]]

same $71 million would collect over 1.4 billion uncollected tax 
dollars. Independent observers know that investing in the IRS and its 
employees rather than unaccountable private contractors will get more 
money and will do so in a more humane fashion.
  It was shocking for the committee to listen to some of the phone 
calls, to the abuse that has been subjected to American taxpayers who 
are caught in the ``Alice in Wonderland'' of these private collectors.
  I would urge my colleagues, if they have any doubt, to try an 
experiment. I have done this at home. I have met with CPAs, tax 
attorneys and with financial advisers. All of them suggest investing 
more in the IRS infrastructure to improve customer service, and it will 
collect more money.
  I would strongly suggest that it is time to stop this dark chapter of 
emasculating the IRS, giving money to private contractors, and instead, 
do a better job for the taxpayer.
  I for one support the notion of the 1-year suspension of the 3 
percent contractor withholding. I think it makes sense to try and sort 
this out. I think it needs more examination. I think we can have a 
better proposal. This got slipped in in the Senate without any House 
consideration in the last Congress. I think a delay makes sense. I 
support it. I support the underlying bill, and I urge my colleagues to 
do the same.
  Mr. BRADY of Texas. Mr. Speaker, I would point out that this practice 
has already generated nearly $6 million for additional IRS agents in 
collection activities at the agency.
  At this time, I would like to yield 3 minutes to the gentleman from 
Florida (Mr. Boyd).
  Mr. BOYD of Florida. Mr. Speaker, I thank Mr. Brady for yielding, and 
I rise to oppose H.R. 3056.
  Let me start, Mr. Speaker, by saying that I strongly support the 
right of public and private employees to organize and to work for 
better working conditions and to improve the quality of life in their 
workplaces and in their communities, and my record reflects that.
  However, I think there is something that we all agree upon, as 
Democrats, as Republicans, as public employees, private sector 
employees, and that is that there is a huge tax gap in this Nation, and 
that tax gap is to the tune of $345 billion. It adds, on the average 
taxpayer, about $2,700 to its tax bill on an annual basis. These are 
tax dollars, most of them having been acknowledged by the taxpayer that 
they owe, but the IRS has not been able to go after them for whatever 
reason. And so the IRS private debt collection program is putting money 
back in the pockets of hardworking Americans.
  I would like to tell you that the private collection agencies working 
on this contract do not replace a single IRS worker, and no IRS jobs 
are lost through this program. To date, this program has recovered 
about $30 million in delinquent taxes. Through this pilot project, the 
IRS has turned over about 77,000 cases worth nearly $450 million in 
unpaid taxes.
  Now, I heard some speak about harassment, undue harassment by private 
collectors. I have to tell you, Mr. Speaker, that this program is 
closely scrutinized by the IRS. And the IRS program has, according to 
the Internal Revenue Service itself, received a 98 percent favorable 
rating from the IRS for regulatory and procedural accuracy, and a 100 
percent rating for professionalism.
  This program has also received at or above a 96 percent rating for 
taxpayer satisfaction. Less than 1 percent of those taxpayers collected 
by the private collection agencies have filed complaints with the IRS, 
and none of those complaints against the companies currently 
participating in the program have been validated.
  Mr. Speaker, this program is bringing in money to the U.S. Treasury 
without raising taxes and closing that tax gap, and will be able to 
close that tax gap if we can keep the programs and improve them, money 
that otherwise would never be collected. To this end, it would be a 
very bad message to send that we are not serious about closing the tax 
gap.
  I urge my colleagues to vote down H.R. 3056.
  Mr. POMEROY. We had hearing testimony on the survey that was 
referenced by my friend from Florida. Basically, the GAO testified that 
the survey was fundamentally flawed. Of 300,000 conversations that have 
taken place, 1,000 were the subject of the survey for getting taxpayer 
satisfaction, and the private debt collectors were able to pick which 
ones got the survey. So a 1,000 survey sample out of a 300,000 
universe, with those stakeholders picking the ones that get to say it, 
was not deemed as credible by the GAO and not deemed as credible by the 
majority on Ways and Means.
  With that, I yield 2\1/2\ minutes to the gentleman from New Jersey 
(Mr. Pascrell).
  Mr. PASCRELL. Mr. Speaker, this is a cooked-up survey that was just 
referred to. In the words of the former IRS Commissioner, Mark Iverson, 
appointed by President Bush, he testified that the IRS can collect 
Federal taxes more cheaply, more efficiently than private companies. I 
rest my case.
  I rise in strong support of H.R. 3056. This legislation is designed 
to protect taxpayers by repealing the authorization for the IRS to use 
private contractors to collect Federal income taxes.
  Few would disagree that the collection of Federal taxes is an 
inherent government function. We have seen, through multiple hearings 
in Ways and Means, that privatizing and outsourcing this fundamental 
role has been a mistake on many levels. We've learned of numerous cases 
of harassment, not overexaggeration, on the record, abusive calling, 
violations of the rights of taxpayers. We've discovered that some 
taxpayers, many of whom were elderly, have had to endure literally 
hundreds of phone calls from private collectors. We listened to those 
phone calls. We had them on tape. Tapes are a terrible thing, you know. 
They don't lie.
  Other cases involve people in nursing homes, those who have served in 
Iraq, and low-income taxpayers facing economic hardships. And as if 
taxpayer harassment was not enough, we have also seen that the program 
is inefficient. So far, privatizing tax collection has actually cost us 
money. Currently, we are $50 million in the hole. The IRS has spent $71 
million to collect a net of $20 million. This is just like the postal 
department with the privatizing of providing mail throughout the United 
States. Now they're backing off, finally. It has been a disaster.
  After paying $5.5 million in commissions to the private debt 
collectors, they make a commission of $5.5 million, and they can't do 
the job. This just doesn't make sense.
  Mr. Speaker, if $70 million was spent on IRS employees instead of 
private contractors, statistics project that they would have collected 
over $1.4 billion. That's quite a difference, indeed. And taxpayers 
deserve more. They expect to deal with their government when they have 
a tax problem.
  Private debt collection must end, and today we do that. I thank 
Chairman Rangel and John Lewis, chairman of the Ways and Means 
Oversight. I thank Congressman Rothman from the State of New Jersey for 
his persistence. I implore all of my colleagues to vote in favor of 
this legislation.
  Mr. BRADY of Texas. Mr. Speaker, I would point out that at the Ways 
and Means hearings, the Government Accountability Office testified they 
had looked for but could not find any evidence that the private 
collection agency selected individuals for the survey based on their 
perception of what the responses would be. I would point out that the 
same agency testified that there were zero, no violations of any 
privacy rights through 51,000, and growing, cases, zero violations. And 
I do wish that those telephone tapes could be played here on the House 
floor so members of the public as well as Congress could hear the 
professionalism of those phone calls as they seek to identify 
sensitively the individuals who do owe dollars to the American 
taxpayers.
  I will point out, too, that if these debts were so easy to collect by 
the IRS, why did the IRS already have four

[[Page 27006]]

opportunities to collect them from each taxpayer before they were 
turned over to these agencies, who have done such a good job, a solid 
job of collecting them?
  With that, I would yield 6 minutes to the gentleman from New York 
(Mr. Reynolds) who has not only fought on behalf of taxpayers but has a 
number of women and minority workers and professionals in his district 
who have done a wonderful job in this arena.

                              {time}  1630

  Mr. REYNOLDS. Mr. Speaker, I rise in strong opposition to the bill 
before us today. I thank the ranking member of the Ways and Means 
Committee for his ongoing efforts to defeat this misguided proposal and 
other members of the Ways and Means Committee who have also carried a 
strong voice, such as the gentleman from Texas.
  For some Members of this body and both sides of the debate, this 
issue is simply about policy. We understand that. For them, it is an 
abstract question about whether private collection agencies or so-
called PCAs should be able to play a limited, supplementary role in the 
IRS's efforts to collect delinquent tax debt. But for me and the area I 
represent in western New York, it is about both policy and much more 
than that. It is about jobs.
  As a Member of Congress who represents rural Wyoming County in 
western New York, I am actually more familiar than most with the work 
that PCAs do. After all, the largest single private employer in Wyoming 
County is Pioneer Credit Recovery. It is one of only 2 companies 
nationwide that the IRS has selected to help get its important program 
underway.
  Mr. Speaker, Pioneer Credit is a highly respected, local business 
that has created more than 1,400 high-paying jobs for families living 
in either my district or neighboring districts around Buffalo and 
Rochester. As my fellow members of the western New York's congressional 
delegation know, these jobs have been created in a region that has 
faced serious economic challenges. As I have listened today to this 
debate, sometimes you wonder just exactly who might be on that phone. 
These are highly trained rural folks coming from communities much like 
the gentleman from North Dakota has in North Dakota. It just happens to 
be a rural area of a large State of New York. For some people, that is 
their only income to the household. For some it is a supplement to farm 
income or manufacturing income. And I have looked at some of these 
people I have known for years. I have seen some of these people where I 
have just met them the day they went to work to have a meaningful job, 
after maybe a manufacturing shop closed down in Wyoming County. Or they 
weren't able to stay on the family farm.
  But they are hardworking, decent people who subscribe to Federal and 
State laws that this honorable body actually has set forth in the past 
that deliberated and said, you will function as collectors. I know one 
thing about the people's House: We have had a lot of people from a lot 
of different backgrounds, but you know, as a small businessman myself, 
I promise you the only time I send out, in the days I was in business, 
to a private collection agency was when I couldn't collect that money 
for an insurance premium or commissions owed and I had no other 
recourse but to look in private collection. They professionally got the 
job done to bring back money that was owed.
  As my colleague, Mr. Brady, has pointed out, the IRS sometimes had 
four chances to kind of get this money and still didn't come back with 
it. We looked at an opportunity, could we gain over 10 years over $1 
billion in order to increase the revenues or address the tax gap that 
my colleague from Florida talked about.
  So when the IRS contract was allowed to Pioneer Credit to turn an 
empty warehouse in Perry, New York, into a thriving job center for 
newly hired employees, it has been a great economic success story for 
part of western New York that desperately needed it, and it began to 
produce the results that the Congress and the IRS expected. So as 
someone who has fought to give the IRS the authority to partner with 
these private companies in the first place, I am deeply troubled that 
the new majority is now threatening to deauthorize this important 
program just as it gets underway. If this program is allowed to 
continue, Pioneer Credit will be given the opportunity to compete for 
future IRS contracts that could create many additional jobs in the area 
I represent. Killing this program, on the other hand, would cost my 
constituents real jobs at a time when Congress should be working to 
expand employment opportunities, particularly in hard-hit areas that 
are struggling economically.
  I would also note, Mr. Speaker, that under the Democrats' PAYGO 
rules, proposals that reduce anticipated Federal revenues must be 
offset by other provisions that raise revenue. Thus their proposal to 
eliminate the PCA tax collection program, which is expected to net at 
least that billion dollars over the next decade, also requires them to 
raise $1 billion in new taxes somewhere else.
  This bill is wrong on policy. It is wrong on job creation. It is 
wrong on tax hikes. I urge a ``no'' vote.
  Mr. POMEROY. Mr. Speaker, the gentleman has spoken passionately about 
the jobs in his district, and I look forward to working with him on 
economic revitalization issues so vitally important to rural areas like 
the ones he and I both represent. But this is really not a jobs program 
before us. What is the best way for taxpayers to have collected what 
they owed? We want to collect what we are owed. We believe for every 
IRS employee, we are going to collect $20. For every private debt 
collector, the optimistic projection is you are going to collect $4. 
The reality has been much less than that. So when we are talking about 
the issue before us, what is the best way to get the money we are owed? 
The best way to do it is hire the personnel, train the personnel, run 
an IRS capable of getting its job done.
  I yield 2 minutes to my friend from Nevada, Congresswoman Berkley.
  Ms. BERKLEY. I thank the gentleman for yielding.
  Mr. Speaker, I rise today in support of the Tax Collection 
Responsibility Act. This bill will prevent the IRS from using private 
debt collectors to collect Federal income taxes when current contracts 
have expired.
  Private debt collectors have proven to be very poorly equipped for 
the job. This change is important to protect taxpayers' privacy. Coming 
from Las Vegas, I have never been a great fan of the IRS. IRS abuse in 
Las Vegas is legendary. The only thing worse are private debt 
collectors that have harassed, threatened and intimidated the taxpayers 
in my district and throughout the United States to collect back taxes 
and to also collect a hefty fee. The IRS ought to do its job of 
collecting taxes and Congress ought to do our job by giving them the 
resources the IRS needs to do its job.
  The bill also proposes implementation of a 3 percent withholding 
requirement on government payments to vendors. This requirement will 
cause significant administrative and financial burdens on local 
governments. As a local government that spends more than $100 million 
per year on vendor products and services, Clark County, Nevada, would 
be required to withhold 3 percent of payments to businesses. Under the 
new requirement, companies that contract with local government would be 
terribly and unfairly penalized. This could result, it will result in 
cash flow problems for small businesses and ultimately higher prices 
for all consumers. This bill will postpone the 3 percent withholding 
requirement to give the Treasury Department time to study the impact of 
this provision on local governments and taxpayers before it is 
implemented.
  Mr. Speaker, I urge my colleagues to support this important 
legislation for both reasons that I have stated.
  Mr. BRADY of Texas. Mr. Speaker, I would point out that while the 
claim has been made that our taxpayers have been harassed, IRS itself 
has testified there is a 97 percent satisfaction rate with the process 
that is already in place with these private collection

[[Page 27007]]

agencies. I must point out, too, that while a claim is made that past 
Congresses starved the IRS, the truth is actually the opposite. The 
agency last year added over 200 new field collection personnel. This 
year's budget will add even more agents to the IRS. This program that 
is being sought to be eliminated has already generated almost $6 
million for more IRS agents in a collection agency.
  Mr. Speaker, I would like to inquire how much time does each side 
have remaining.
  The SPEAKER pro tempore. The gentleman has 6 minutes remaining; the 
gentleman from North Dakota has 11\1/2\ minutes.
  Mr. BRADY of Texas. At this time, I would reserve the balance of my 
time.
  Mr. POMEROY. Mr. Speaker, it is my pleasure to yield 4 minutes to the 
bill's prime sponsor, the gentleman from Maryland (Mr. Van Hollen).
  Mr. VAN HOLLEN. Mr. Speaker, I thank my colleague from North Dakota 
for his long-time efforts on behalf of fair treatment for taxpayers in 
this country. I rise in strong support of this legislation, the Tax 
Collection Responsibility Act of 2007.
  In addition to endorsing the practices that this bill provides for 
better collection and fairer collection for small businesses, I also 
believe it is high time we repeal an abusive and misguided debt 
collection program at the IRS. I am pleased to have worked on this 
issue for a number of years with my colleague from New Jersey (Mr. 
Rothman) and others.
  I think we all know that it is not a new issue to this body. We tried 
private tax collection in 1996 and promptly abandoned it a year later, 
after which time the IRS Office of Inspector General found that private 
contractors regularly violated the Fair Debt Collection Practices Act, 
jeopardized the confidentiality of taxpayers personal information, and 
cost the government a net revenue loss of $17 million.
  Under the Republican Congress, this program was revived and came to 
the floor actually in a form that we did not have a chance to vote 
separately on it, because when the House has had an opportunity over 
the last 3 years to vote separately on this issue, this body on a 
bipartisan basis has said no to private debt collection. That bill 
never made it to the President's desk. But there is a good reason this 
House has said no to this program. That is because IRS officials 
themselves have acknowledged that using private debt collectors is much 
more expensive than having the IRS do the job. Today on the program 
that we are talking about, the IRS has spent $71 million and collected 
a net of $20 million. That is a losing proposition on its face.
  Moreover, in her testimony before the Ways and Means Committee, the 
National Taxpayer Advocate, Nina Olson, whose job at the IRS is to look 
out for the fair treatment of taxpayers, recommended that we end this 
program and further pointed out, as others have said, that if you took 
the same amount of money and invested it in allowing IRS agents to 
collect the revenue, you would collect $1.4 billion instead of the $20 
million collected so far in this program.
  In addition, and I think this is an important point to make, when 
this Congress in the 1990s passed the IRS Restructuring and Reform Act, 
we specifically said that our public employees, our IRS agents, could 
not receive bonuses, could not receive special rewards for collecting 
more taxes because we want to avoid an incentive for abuse; yet that is 
exactly the premise this entire program is based on. It is based on 
bigger rewards in the sense for more taxes collected. That is what 
leads in turn to abusive tax practices that we have said we don't want 
our IRS agents to comply. In addition to the fact, the result is for 
every dollar collected under the private tax collection, 25 cents goes 
to a private company; whereas, with IRS agents, that dollar collected 
goes to the Federal Treasury for debt reduction and for investment in 
important public purposes. So it is a much better return for the 
taxpayer.
  I would argue, Mr. Speaker, that it is very clear over the years that 
our repeated experiments in private debt collection have failed. If the 
IRS needs additional resources to collect uncollected revenues, and I 
think it does, we have heard from the IRS Commissioners in Republican 
and Democratic administrations alike, that a much better investment is 
to put those dollars into our public IRS agents. It results in less 
abusive practices. It makes sure that you also have the dollars come 
back where it belongs to the taxpayer and the public benefit.
  Mr. BRADY of Texas. I would point out it is difficult to have an 
abusive program when there is 97 percent customer satisfaction and zero 
privacy violations and zero Fair Debt Collection Act violations. Zero. 
I point out as far as efficiency, you don't have to take anyone's word 
on this floor if this program is working. Attached to this bill is 
testimony that says eliminating it will cost the U.S. taxpayers $1 
billion.

                              {time}  1645

  So you don't have to take our word for it. The experts who are 
independent, who have looked at this issue, know this is an efficient 
program for the U.S. taxpayers.
  Mr. Speaker, I reserve the balance of my time.
  Mr. POMEROY. Mr. Speaker, our information is somewhat different from 
the information just propounded. We believe indeed the record would 
show there have been 83 complaints. These complaints include taxpayers 
who have received letters with another taxpayer's information inside. 
Now, if this isn't a taxpayer privacy violation, I don't know what is. 
At least one fine has been assessed, and this is in the early going of 
the program.
  Mr. Speaker, I will acknowledge perfection is a pretty hard standard 
to meet, but they have not met perfection and they have not generated 
the money in collection that was advertised at the beginning of this 
endeavor.
  With that, I yield 2\1/2\ minutes to my friend the gentleman from New 
Jersey (Mr. Rothman), who has long had concerns about this initiative 
and worked hard to end it.
  Mr. ROTHMAN. I thank the gentleman from North Dakota for all his 
wonderful work on this. I want to thank Mr. Van Hollen. I want to thank 
my chairman on the appropriations subcommittee, Mr. Serrano, and so 
many people who were so outraged at this private collection of taxpayer 
money that is owed to the IRS.
  Mr. Speaker, here's the problem. About $300 billion is owed to the 
American taxpayers by those income earners who refuse to pay their 
taxes. They admit they owe the money, but they refuse to pay. That is 
about $300 billion. That is the problem.
  Now, what is the solution to the problem? Well, the Republicans here 
say, let's privatize this, give it to private people, private companies 
who will make a profit on collecting these tax moneys, and they will 
collect about $4 for every $1 we spend on them. They will collect $4. 
The other solution is to hire more IRS agents, and for every $1 we 
invest in them, we will get $20. Not the $4 that goes to the private 
debt collectors that they produce, but $20. We will collect five times 
more.
  So why would we give away the taxpayers' money by letting private 
debt collectors collect our debts, just so we can collect five times 
less? They say, ``Well, we don't want to support big government.'' 
Well, do they want to waste all those tens or hundreds of billions of 
dollars by giving it to private debt collectors to collect at five 
times less effectiveness? It makes no sense. But this is nothing new.
  Mr. Speaker, they wanted to privatize Social Security. They 
privatized the prescription drug program for seniors. They wanted to 
privatize the collection of our mail. They wanted to privatize, and 
they did, security contracting in Iraq, There is Halliburton, 
Blackwater. And they did so at Walter Reed Army Hospital.
  So this ideology of the Republican Party and this President that we 
need to privatize everything doesn't make sense, it wastes taxpayer 
dollars, and in fact is an opportunity for a very select few in our 
society to profit at the expense of everybody else. Not only is

[[Page 27008]]

it un-American, it is wasteful, it is wrong.
  Mr. Speaker, we can do better with this solution. That is why I have 
been fighting for this for years, and I am so proud to support H.R. 
3056. If they say the choice is do nothing or something, do it the 
right way and pass H.R. 3056.
  Mr. BRADY of Texas. Mr. Speaker, I would point out that private debt 
collection is used by 40 different States, whose Governors are 
Republican and Democrat, and thousands of local government agencies and 
organizations, again, both Republican and Democrat. This isn't an issue 
of privatization, it is an issue of efficiency. This partnership 
between the IRS and private debt collectors for this group of taxpayers 
who are hard to collect those taxes from will yield an additional $1 
billion for the American people.
  With that, I reserve the balance of my time.
  Mr. POMEROY. Mr. Speaker, as part of the IRS appropriation, we fund 
the National Taxpayer Advocate. In her 2006 annual report, she writes, 
``We are concerned that private collectors are using trickery, device 
and belated Fair Debt Collection Practices Act warnings to take 
advantage of taxpayers. We are concerned private collectors are taking 
advantage of taxpayers.'' That is from the National Taxpayer Advocate.
  With that, I yield 2 minutes to the gentleman from New York (Mr. 
Serrano), who has advanced the prohibition of this ill-advised endeavor 
in the Appropriations Committee.
  Mr. SERRANO. I thank the gentleman.
  Mr. Speaker, this has to be one of the worst ideas ever put forth. 
Just think of it: Instead of getting the IRS to collect the tax 
dollars, we go and tell someone else that they can collect 24 cents on 
the dollar, instead of hiring more folks to collect what they have been 
doing for so many years. So we lose 24 cents on every dollar, rather 
than have someone take care of this.
  Now, the IRS has spent $71 million in money we have given them on 
this program and have collected in return somewhere between $20 and $25 
million. The IRS Taxpayer Advocate, as was mentioned by the gentleman, 
calculated that if this money had been spent by the IRS to collect, 
they would have collected $1.4 billion.
  Mr. Speaker, we have also heard here about the harassment tactics. 
Now, we can deny it as much as we would like, but when you give me an 
incentive of 24 cents on the dollar to collect from taxpayers, things 
can get out of hand. That is why senior citizens have been called 150 
times in a month's time, looking for their son. My friends, these kind 
of tactics would make a great comeback episode for ``The Sopranos,'' 
and I think one might be in the works.
  Mr. Speaker, the IRS can do this work. We tried to do this, as you 
know, in our committee, and it was defeated, basically with the 
minority party saying on a point of order they would pull it out of the 
bill. But it was our intent to do that in our bill. In addition, we put 
in $400 million in fiscal year 2008. With this funding, the IRS should 
be able to start working on these cases themselves, without 
outsourcing.
  I know, as Mr. Rothman has said, that there is a madness in this 
House about taking everything that American workers do and sending it 
somewhere else, overseas usually, and then what government employees 
do, they send it to another agency or to somebody else. I can't wait 
for the day when you decide that the whole Congress should be 
outsourced overseas and we should have people doing our work.
  Mr. Speaker, this is a bad idea. We should pass this bill and stop 
this program immediately.
  The SPEAKER pro tempore. The Chair would advise that the gentleman 
from North Dakota has 2 minutes and the gentleman from Texas has 5 
minutes.
  Mr. BRADY of Texas. Mr. Speaker, I would remind the Chamber that more 
than 40 States, not just this administration, more than 40 States, 
Democrat Governors and Republican Governors, use the exact same type of 
collection techniques, the same partnerships, to do what is right for 
the American people.
  I would point out that we have heard claims today of literally tens 
of thousands of people who have been harassed by these private debt 
collectors, all the abuses. I would simply challenge you to name one. 
In this debate today, name one. Name the person, name the case where 
there was a privacy abuse or thousands of harassing phone calls. I 
would predict there will be no name mentioned.
  Mr. Speaker, I reserve the balance of my time.
  Mr. POMEROY. Mr. Speaker, I would just again read from the National 
Taxpayer Advocate report: ``We are concerned private collectors are 
taking advantage of taxpayers.'' I will submit this for the Record.
  With that, I will yield 1 minute to the gentleman from Pennsylvania 
(Mr. Sestak).
  Mr. SESTAK. Mr. Speaker, I rise in support of this bill for three 
reasons. First is the cost. As my colleagues have previously said, we 
should have raised from these private agencies at least $44 million to 
$63 million to date. In fact, it has only been $25 million, with a sum 
cost of $51 million.
  Second is the more cost-effective way that another agency, the IRS, 
might do this. We know that they have collected this year alone $5.3 
million from the Automated Call Service. Imagine if we had not 
decreased the number of IRS officers from 8,500 during the nineties 
down to only 5,200 today and we had put the money into them or into the 
Automated Call Service. That 20-to-1 return that the government gets 
far exceeds the 4-to-1 return of private agencies.
  Third, however, after 31 years in the military, it pained me to see 
us outsource our security operations to private agencies in Iraq. At 
times there is abuse, not dissimilar to what we hear today, such as 
seniors and those in Iraq being called. In fact, a senior couple was 
called 150 times, five times a day. Then we learned they had the wrong 
number.
  Mr. Speaker, I therefore rise in support of this bill because of the 
cost-effectiveness of the IRS and because of the abuses that can occur 
if it is not within a government agency.
  Mr. BRADY of Texas. Mr. Speaker, I would point out that attached to 
the majority's bill that this House is considering today, according to 
the majority's bill, the Joint Tax Group testifies and asserts that 
this program, that is working today, will collect $1 billion more. You 
can hear every claim you want on this House floor, but their own bill 
says to the American public that this program will collect $1 billion 
more than if it were to be eliminated. That is not at dispute today.
  Mr. Speaker, I reserve the balance of my time.
  Mr. POMEROY. Mr. Speaker, the cost cited assumes that not a nickel is 
spent on IRS capacity. Indeed, if we spend it on IRS capacity, the 
unrefuted evidence is that it would be a 5-to-1 return relative to 
private collectors.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BRADY of Texas. Mr. Speaker, I yield 2 minutes to the gentleman 
from New York (Mr. Reynolds).
  Mr. REYNOLDS. Mr. Speaker, this won't be the first or last time that 
debate on the floor comes on disagreements of policy or well-crafted 
rhetoric that goes to the extreme of bringing forth one's position. But 
I think that my colleague, Mr. Brady, and others who have spoken in the 
aspect that private collection has worked in the portion that has been 
assigned in their mission as they get underway, that the complexity of 
collecting taxes of the tax gap, which, if you recognize the tax gap as 
a challenge of revenue, one that this Congress very quickly and gladly 
put forth, that $1 billion of collections through private collection 
agencies would be achieved, and as we now embark on that, we have 
listened to tough language and rhetoric, and I sat through most of 
those public hearings, crafting today the reflection of what they 
thought they heard in those hearings. I think that if we look at 
results as we move towards the opportunity of seeing private 
collection, because one thing that has been omitted, if I am not 
mistaken, regardless of what this body does, the other body will have a

[[Page 27009]]

serious challenge in seeing legislation passed, and there is a 
Presidential veto that says that it will not occur.
  So as we measure in the future the work that has been done that has 
been assigned to the PCAs, and we look at the aspect of a goal that all 
of us would have, that the IRS has tools to do their job so that 
collection continues, I think we will also see in short time that 
private collection agencies have done the mission they were asked to do 
in the pilot out in Iowa and in western New York, and I think as we 
give that a chance, not only will this legislation not be needed, but 
it will not see the light of day.
  Mr. BRADY of Texas. Mr. Speaker, may I inquire as to the time 
remaining.
  The SPEAKER pro tempore. The gentleman has 1\1/2\ minutes.
  Mr. BRADY of Texas. I will be brief, Mr. Speaker.
  We hear a lot of claims today about the efficiency of this program. 
But our agencies, the independent agencies, the Government 
Accountability Office and Joint Tax, make the point attached to this 
legislation that this program has worked, is working efficiently, and 
will save U.S. taxpayers more than $1 billion.
  You will hear today about abuses. But the fact of the matter is they 
can name not one in any independent agency, including the IRS, the 
Treasury. Examination of the program has showed 97 percent customer 
satisfaction, zero privacy violations, and zero Fair Debt Collection 
Act violations, zero, no matter what is talked about.
  Mr. Speaker, the truth of the matter is, the question before us today 
is not about privatization. This is about credibility. This majority 
has talked about closing the tax gap, what is owed and what is paid. 
Yet today we will widen that tax gap by over $1 billion. So the 
question is will we walk the walk, or just talk the talk about the tax 
gap.
  This partnership between the IRS and these private collection 
agencies is working for the American public. We ought to let it 
continue to work for the American public, because we can use that $1 
billion for health care, for education, for helping our veterans, for a 
number of important priorities in this budget.

                              {time}  1700

  And we will have some type of a financial standoff here in a few 
months, yet we let $1 billion escape our grasp. I urge a ``no'' vote on 
the bill.
  Mr. Speaker, I yield back the balance of my time.
  Mr. POMEROY. Mr. Speaker, we believe private debt collection of IRS 
debt is a terrible idea and an important matter, which is why the 
majority leader will close for our side. I yield the balance of our 
time to the majority leader, Mr. Hoyer, from Maryland.
  Mr. HOYER. Mr. Speaker, I thank my friend for yielding.
  First, let me respond to a point Mr. Brady has made a number of 
times. The point I am referring to is if we did not spend any money on 
private collection, we would not collect $1 billion. We can accept that 
as accurate. But the assumption is that we wouldn't spend any money in 
the public sector to collect that money. But I will read figures that 
say if we did that, we would geometrically collect more than a billion 
dollars by a factor of two or three or four or five. I will read that 
figure, Mr. Brady. But you keep reading the figure, the assumption of 
which is we are simply going to drop collection. We are not going to 
drop collection.
  Today, through this important legislation, the Tax Collection 
Responsibility Act, this House will reiterate that the collection of 
taxes is a core governmental function that should not be contracted out 
to private companies.
  But no one, no one should be mistaken. Our objection to the private 
collection of taxes is not simply philosophical; it is practical, as 
well.
  First, there simply is no evidence that private tax collectors are 
more efficient. In fact, the opposite is true.
  IRS Commissioners of both parties repeatedly have testified before 
Congress that IRS employees could do this work more efficiently. In 
fact, according to the IRS, the return on investment for IRS employees 
doing work similar to private collection agencies is 13:1. The private 
collection agency return is about 4:1, or approximately one-third as 
effective in the private sector as it is in the public sector. That is 
what the IRS Commissioners say.
  Secondly, with Americans legitimately concerned about the privacy of 
their personal information and identity theft, I don't believe, and I 
hope this House does not believe, that it is good policy to turn over 
Social Security identification numbers and tax information to private 
collection companies.
  Third, the National Taxpayer Advocate has raised concerns about the 
tactics used by private collection agencies, including intimidation and 
harassment. The fact is that private tax collectors are keeping 21 to 
24 percent of what they collect, and are allowed to keep up to 25 
percent under the law. Thus, with the compensation of private 
collection agencies directly tied to what they collect, they are 
incentivized to use aggressive tactics. Ironically, however, and let me 
go back to that figure, they are less effective in collecting, 13-to-1 
versus 4-to-1, than the public sector.
  Finally, let me say too many of my Republican friends want it both 
ways. On the one hand, Republican-controlled Congresses have cut the 
IRS workforce by 20,000 people since 1995. In fact, just this year they 
offered an amendment to the Financial Services Appropriations bill that 
would cut IRS funding by 8.9 percent; yet they come to the floor and 
say we are not aggressively collecting sufficient funds so we have to 
privatize it, contract it out. That expense, of course, is an 
additional expense, which, by the way, escalates more rapidly than does 
the public sector expense.
  As I said, they complain that we must allow the government to hire 
private collection agencies because the IRS does not have the resources 
to recover all income tax that is owed. So on the one hand, cut their 
resources, and then come to the floor and say they don't have 
sufficient resources to do the job so we will contract it out, which 
will require, of course, contract resources while eliminating salary 
resources.
  I think we all know the most effective solution: We need to provide 
the IRS with the resources it needs to ensure that all taxpayers pay 
their fair share under the law, so that no taxpayer has to pay more 
than their fair share or have rates greater than they need to be, which 
would be the case if everybody paid their fair share.
  Mr. Speaker, this legislation is an important step in that effort. I 
urge all of my colleagues, Mr. Speaker, to vote for this important 
bill.
  Mrs. CHRISTENSEN. Mr. Speaker, I rise in strong support of H.R. 3056 
to amend the Internal Revenue Code of 1986 to repeal the authority of 
the Internal Revenue Service to use private debt collection companies, 
to delay implementation of withholding taxes on Government contractors, 
to revise the tax rules on expatriation, and for other purposes.
  I want to begin by thanking the gentleman from New York, the chairman 
of the Ways and Means Committee, Charles Rangel, for including language 
to address the question of the statute of limitations for residents of 
the U.S. Virgin Islands.
  As you know Mr. Speaker, residents of the Virgin Islands, as citizens 
of the United States, are required to pay Federal income tax like any 
other citizen living outside the United States. However, section 932 of 
the Internal Revenue Code, ``Code'', states that bona fide residents of 
the Virgin Islands are not required filing an income tax return with 
the IRS. Instead, they are required to file their income tax return 
with, and pay the applicable tax to, the government of the Virgin 
Islands. The amount of the liability to the Virgin Islands, determined 
under the ``mirror code'' system, in most cases is exactly the same 
amount that they would otherwise have been required to pay to the 
Federal Government.
  In response to concerns that some U.S. citizens claimed tax benefits 
who neither lived nor worked in the Territory, Congress tightened the 
income and residency rules of the Virgin Islands Economic Development 
Commission, EDC, program as part of the American Jobs Creation Act of 
2004.

[[Page 27010]]

  The U.S. Internal Revenue Service subsequently initiated a 
comprehensive series of audits not only of individuals who participated 
in the Territory's EDC program, but also many taxpayers who had moved 
years earlier to the Virgin Islands and who did not participate in the 
EDC program as well as taxpayers who were born in the Virgin Islands 
but who had spent periods of their working life outside the Territory 
due to the lack of opportunities in the Virgin Islands.
  In the course of these audits, the IRS reversed its long-standing 
administrative practice and published position, and now claims that the 
statute of limitations never runs for V.I. taxpayers who reasonably and 
in good faith file their tax returns with, and pay their tax to, the 
Virgin Islands Bureau of Internal Revenue, ``BIR'', as the law requires 
them to do. In a General Counsel Advisory Memorandum, the IRS announced 
its new position that it has the right to audit the returns of a V.I. 
taxpayer as far back as they like and, if the IRS determines under the 
subjective pre-Jobs Act test that the taxpayer was not a bona fide V.I. 
resident, that it can assess full tax and penalties even if the 
taxpayer has paid the correct amount to the Virgin Islands. Because the 
Virgin Islands statute of limitations will have run in many of these 
circumstances, the taxpayer will be precluded from seeking a refund of 
tax paid to the Virgin Islands, and thus be subject to double taxation. 
Moreover, since the IRS position reverses a previously issued IRS 
advisory memorandum and also ran counter to the general rule that 
persons can be audited for up to 3 years after filing a return, many 
taxpayers who are being audited no longer have the records to defend 
themselves.
  The bill before us today would end this heavy handed and unfair 
practice and treat bona fide U.S. Virgin Islands residents who files a 
return in the territory in the same manner as if the return were an 
income tax return filed with the United States.
  I urge my colleagues to support adoption of H.R. 3056.
  Mr. UDALL of Colorado. Mr. Speaker, I strongly support this bill but 
must oppose the effort to add a provision dealing with the estate tax.
  I have long supported reform of the estate tax, not its complete 
repeal.
  I think we should change it in a way that will strike the right 
balance, protecting family-owned ranches, farms, and other small 
businesses while recognizing the need for fiscal responsibility in a 
time of war.
  But the motion to recommit would have simply added to the bill a 
permanent repeal of the estate tax. I do not support that and cannot 
vote for it.
  However, I can and will vote for the underlying bill, which will 
repeal the use of private debt collection companies to collect Federal 
income taxes, delay the application of an onerous 3 percent withholding 
requirement on Government payments, and discourage individuals who 
renounce their U.S. citizenship to avoid paying taxes.
  I am a cosponsor of H.R. 695, the Taxpayer Abuse and Harassment 
Prevention Act of 2007. Like the bill now before the House, it would 
amend the Internal Revenue Code to repeal the authority of the 
Secretary of the Treasury to enter into contracts with private 
collection agencies to collect unpaid taxes. I support that because of 
the numerous instances in which private collection agencies have been 
guilty of taxpayer harassment, abusive calling, and violations of 
taxpayer rights, the Fair Debt Collection Act, and taxpayer return 
disclosure protections. I understand that right now the Federal Trade 
Commission has 130 complaints likely to involve the private tax debt 
contractors, and the Taxpayer Advocate has many more.
  In addition, H.R. 3056 would delay until December 31, 2011, the 
application of a recently-enacted provision requiring withholding of 3 
percent of the value of government payments to contractors and small 
businesses for goods and services. Local governments from across 
Colorado have contacted me to urge that the requirement be repealed--
and while this delay falls short of that, it will provide additional 
time for Congress to consider repeal or drastic revision of the 
requirement.
  Finally, the bill would impose an immediate tax on individuals who 
renounce their U.S. citizenship in order to avoid paying their taxes 
and enact a scaled-back version of the Treasury Department's proposal 
to increase penalties on failures by independent contractors to provide 
Form 1099 information returns. I think these are reasonable and 
appropriate provisions that deserve support.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise today in support of 
H.R. 3056, the Tax Collection Act of 2007. This legislation will amend 
the Internal Revenue Code of 1986 to repeal the authority of the 
Internal Revenue Service to use private debt collection companies, to 
delay implementation of withholding taxes on Government contractors, to 
revise the tax rules on expatriation, and for other purposes. I would 
like to thank my colleague, the distinguished chairman of the Ways and 
Means Committee, Mr. Rangel, for introducing this legislation, as well 
as for his leadership in bringing this important issue to the floor 
today.
  Mr. Speaker, this legislation strengthens Government accountability 
and protects taxpayers and confidential tax information. It will repeal 
the IRS's authority to enter into, renew, or extend contracts with 
private companies to collect Federal income taxes. Currently, the 
private debt collection program exposes taxpayers to harassment, wastes 
tax dollars by paying a bounty of up to 24 percent to debt collectors, 
and jeopardizes long-term taxpayer compliance. The collection of 
Federal income taxes is an inherently governmental function that should 
be restricted to IRS employees. Furthermore, the use of private 
contractors violates the special and confidential relationship between 
taxpayers and the Federal Government, and could jeopardize the privacy 
of taxpayers, possibly undermining long-term taxpayer compliance. In 
addition, private debt collection is an extremely inefficient way to 
collect Federal income taxes.
  Since the authority to enter into private debt collection contracts 
was first granted in 2004, the Federal Government has spent $71 million 
to collect a net of $20 million in tax receipts. If this money was 
spent hiring IRS employees, the National Taxpayer Advocate estimates 
the Federal Government could have collected $1.4 billion. This 
provision is estimated to cost $1.054 billion over 10 years.
  In addition, this legislation delays the application of the 
withholding requirement on certain governmental payments for goods and 
services. For payments made after December 31, 2010, the Code requires 
withholding at a 3 percent rate on certain payments to persons 
providing property or services made by Federal, State, and local 
governments. The withholding is required regardless of whether the 
government entity making the payment is the recipient of the property 
or services, those with less than $100 million in annual expenditures 
for property or services are exempt. Numerous government entities and 
taxpayers have raised concerns about the application of this provision. 
The provision would delay for 1 year, through December 31, 2011, the 
application of the 3 percent withholding requirement on Government 
payments for goods and services in order to provide time for the 
Treasury Department to study the impact of this provision on government 
entities and other taxpayers.
  Mr. Speaker, this legislation stops the tax benefits for expatriates 
who renounce their citizenship. U.S. citizens and long-term U.S. 
residents are subject to tax on their worldwide income. Taxpayers can 
avoid taxes by renouncing their U.S. citizenship or terminating their 
residence. It would immediately impose a tax on these individuals, 
strengthening current law to ensure that certain high net-worth 
taxpayers cannot renounce their U.S. citizenship or terminate U.S. 
residence in order to avoid paying taxes. Under this provision, high 
net-worth individuals will be treated as if they sold all of their 
property for its fair market value on the day before such individual 
expatriates or terminates their residency. Gain will be recognized to 
the extent that the aggregate gain recognized exceeds $600,000, which 
will be adjusted for cost of living in the future.
  Finally, H.R. 3056 increases information return penalties. This 
provision would increase the penalties for failing to file correct 
returns, failing to furnish correct payee statements, and failing to 
comply with other information reporting requirements. If a taxpayer 
fails to file a correct information return before August 1, current law 
imposes a $50 penalty. This bill would increase this penalty to $100 
per information return, with a maximum penalty of $600,000 per calendar 
year, $250,000 in the case of small businesses. Where a taxpayer files 
a correct information return after the filing date but before 30 days 
after the filing date, the current law $15 penalty will be increased to 
$25, with a maximum penalty of $200,000 per calendar year, $75,000 in 
the case of small businesses.
  Where a taxpayer files a correct information return more than 30 days 
after the filing date but before August 1, the penalty for information 
returns will be increased from $30 to $60, with a maximum penalty of 
$500,000, $150,000 in the case of small businesses. The provision is a 
scaled-back version of the Treasury Department's proposal to increase 
penalties on failures to provide information returns.
  Mr. Speaker, we can reduce the tax gap and make sure that taxpayers 
pay their fair share by having the IRS collect unpaid Federal taxes 
compared to private debt collectors. The American people demanded a new 
direction for America in the 2006 elections, and I

[[Page 27011]]

believe that Congress must stand up for the American taxpayer. The 
current program's practice of giving unaccountable private contractors 
unfettered access to the personal financial data of American citizens 
poses an unnecessary and unacceptable risk.
  Mr. Speaker, I urge my colleagues to join me in support of H.R. 3056, 
the Tax Collection Responsibility Act of 2007.
  Mr. HONDA. Mr. Speaker, I rise today in support of H.R. 3056, the Tax 
Collection Responsibility Act of 2007. Among other provisions, this 
bill would repeal the authority of the Internal Revenue Service, IRS, 
to use private debt collection companies to collect overdue taxes.
  I would also like to voice my support for an initiative being led by 
Senator Ben Nelson of Nebraska to provide disabled veterans and persons 
with disabilities with gainful employment as tax collectors. The 
Disability Preference Program for Tax Collection Contracts would give 
an incentive to private collection companies to employ people with 
disabilities. Despite the pending repeal of these debt collecting 
contracts by the IRS, I sincerely believe this initiative can provide 
immediate benefits to people with disabilities and be used as a model 
program for other services and industries to encourage similar hires.
  Even after enactment of H.R. 3056, complete repeal of private debt 
collection authority would still take a couple of years while the 
existing private contracts expire. In that time, Sen. Nelson's 
initiative could provide disabled Americans invaluable training and 
experience to help continue their careers in similar services, likely 
with the same debt collecting company or even with the IRS. Since much 
of the same background scrutiny in hiring and job training are used for 
both the debt collection companies and the IRS, these disabled 
Americans would have an advantage for employment in the IRS. 
Additionally, under current Federal law, the disabled veterans would 
have right of first refusal to become IRS collectors.
  The extraordinarily large number of returning disabled veterans from 
Iraq and Afghanistan are facing new, unexpected challenges to restoring 
their lives in America. These disabled veterans face an unemployment 
rate three times that of the general population. After their personal 
and their families' sacrifices for their country, it is Congress's 
responsibility to open doors to the largest number of jobs for the 
disabled, and these debt collecting jobs are exceptionally suited for 
people with disabilities. Even multiple amputees returning from Iraq, 
with only a high school education and expecting their career is over, 
could easily perform and excel in this profession.
  Mr. Speaker, while I do not generally support the privatization of 
Federal tax collecting, I applaud Senator Ben Nelson's initiative to 
provide career paths for disabled veterans and people with severe 
disabilities.
  Mr. PASTOR. Mr. Speaker, I rise today to talk about a proposal that 
would be impacted by the repeal of the Internal Revenue Service, IRS, 
program to collect unpaid taxes. The Disability Preference Program for 
Tax Collection Contracts is an initiative championed by the Senator 
from Nebraska, Ben Nelson. It would give an incentive to private third-
party collection companies to hire people with severe disabilities and 
give them high-paying jobs.
  The Disability Preference Program is worth supporting even under the 
assumption that the IRS contracting law should later be repealed. A 
closer look at the Disability Preference Program and the repeal of 
current IRS contracting law clearly shows that the two are not mutually 
exclusive. Until such time as a repeal is passed, workers with 
disabilities (including service disabled veterans) employed by 
contractors are gaining valuable vocational training and work 
experience on-the-job.
  Disabled veterans and other disabled workers would most likely 
``retain employment'' with the contractor through reassignment to 
another project within the company if the IRS contract were to expire 
or be terminated. Private sector collection contractors strive to lower 
attrition and training costs by reassigning exiting staff as projects 
are gained and lost.
  In addition, employees assigned to the IRS contract work at the 
private collection contractor must pass the same level of scrutiny and 
background checks as IRS employees, and undergo IRS-approved project 
training and testing. Therefore, contractor employees will be the 
``best available applicants for job opportunities with the IRS'' when 
the IRS hires internal collectors to do the work before or after 
repeal.
  Under the Disability Preference Program, disabled workers would 
receive valuable training, certification, and job experience to seek 
gainful employment at private sector or government offices performing 
telephone collection work, and therefore would be much ``better 
qualified and prepared to continue a career'' in the collection 
industry than they otherwise would have been if the program was not 
available.
  Although even for a temporary time period, use of this employment 
initiative will provide a much needed demonstration to government 
contracting entities that similar contracting requirements should be 
used to provide good job opportunities for disabled veterans and other 
persons with disabilities.
  I strongly support enactment of the Disability Preference Program for 
Tax Collection Contracts.
  Mr. MEEK of Florida. Mr. Speaker, I rise today in general support for 
H.R. 3056, which as a primary mission puts a stop to the harassing 
nature of private tax collection on a targeted group of American 
citizens, those least responsible for the ever-growing tax gap problem.
  However, I rise to speak in particular about section 3 of the 
Chairman's mark which delays implementation of the 3 percent 
withholding requirement made by section of 511 of last year's Tax 
Increase Prevention and Reconciliation Act of 2005, also known as 
TIPRA.
  Section 511 requires all levels of government with at least $100 
million in annual procurements to withhold 3 percent of payment on most 
procurement contracts.
  The Conference Report for the Tax Increase Prevention and 
Reconciliation Act of 2005 states that section 511 would impose an 
intergovernmental mandate not previously considered by either the House 
or the Senate.
  The costs of this mandate on government would likely exceed the $64 
million threshold established in the Unfunded Mandates Reform Act for 
public-sector mandates.
  The costs of this mandate would also likely exceed the annual $128 
million threshold established in the Unfunded Mandates Reform Act for 
private-sector mandates.
  I am concerned this provision will seriously impact small businesses 
that routinely provide goods and services to the Federal, State and 
local governments, and those governments themselves.
  For example, withholding 3 percent of payments to a primary 
contractor could hamper cash flows needed to meet operating expenses, 
pay suppliers or subcontractors, or meet payroll.
  Any loss of small business involvement in government contracting is 
likely to have a negative effect on government costs associated with 
procurement contracts.
  The withholding requirement would also create a new financial burden 
on the local governments responsible for administering withholding and 
forwarding these types of payments to the IRS, both in the increased 
need for new software and manpower, and in the likely increase in 
contract values as businesses seek to pass the 3 percent on to their 
government clients.
  The 3 percent withholding was originally approved in an effort to 
narrow the ``tax gap.'' Like most, I believe that Congress should 
ferret out non-compliance to the best of our ability. Still, efforts to 
bridge the ``tax gap'' should be weighed first against the potential 
for ``collateral damage to honest taxpayers and local governments.''
  Annual procurements by Federal, State, and local governments add up 
to hundreds of billions of dollars, yet a one year delay, as mandated 
in the legislation before us, costs only $44 million, hardly the amount 
that would be expected if there was rampant noncompliance among 
contractors.
  The language also requires the Department of the Treasury to study 
the negative affects that section 511 would have and report those to 
Congress.
  There are too many questions left unanswered to go forward with the 
implementation of section 511, questions that we have a pretty good 
idea of the answers to.
  I applaud and thank my Chairman, Congressman Rangel, for giving this 
issue a spotlight on a bill that is of high priority to him.
  We know that this is a starting point to full repeal of section 511 
and with the continued grassroots support from the Government 
Withholding Coalition of private industry and the many public sector 
groups like the National Association of Counties, I feel confident that 
we will find the Ways and the Means to do away with this onerous 
requirement.
  Mr. BOYD of Florida. Mr. Speaker, I rise today to discuss H.R. 3056, 
the Tax Collection Responsibility Act of 2007. I find myself in the 
awkward position of opposing the distinguished Chairman of the 
Committee on Ways and Means, but we are being asked to eliminate the 
Internal Revenue Service, IRS, program to collect past-due income taxes 
without an alternative. This program involves the collection of 
millions of tax dollars, and there are no plans in place to collect 
this money if the program were to be killed. There are no plans

[[Page 27012]]

to collect the millions of dollars needed to close the tax gap. 
Additionally, there is also no alternative to finding employment for 
the countless disabled veterans and severely disabled Americans.
  Before we eliminate this program, there should be an alternative in 
place. Our colleague in the other body, Senator Ben Nelson of Nebraska, 
has introduced an initiative that would take the IRS program and use it 
to create meaningful employment for persons with disabilities and 
disabled veterans. The Disability Preference Program for Tax Collection 
Contracts would give an incentive to private third-party collection 
companies to hire people with severe disabilities and provide them with 
quality jobs.
  Mr. Speaker, one in ten Americans has a disability. While the current 
unemployment rate in the Nation stood at 4.7 percent in September, the 
low employment rate of persons with disabilities continues to hover at 
70-80 percent. The high number of returning disabled American veterans 
from Iraq and Afghanistan will only serve to compound this problem.
  Currently, there are not enough jobs to provide gainful employment 
for the severely disabled veterans with only a high school GED. The 
Disability Preference Program would serve to alleviate the lack of 
meaningful employment opportunities for these young men and women. Jobs 
with third-party debt collection agencies can translate to high-paying 
careers. These jobs pay anywhere from $25,000 to $150,000 including 
health and 401(k) benefits.
  Under the provisions of the Disability Preference Program, an initial 
hire of 750 persons with disabilities would save the Federal Government 
close to $350 million over ten years in Supplemental Security Income, 
SSI, and Disability Insurance, DI, benefits alone. This figure does not 
include the additional benefits associated with the hiring of people in 
the $40,000 salary range. This landmark program would not only create 
well-paying jobs for our severely disabled Americans, it would save the 
Federal Government millions of dollars at no cost.
  This legislation is necessary because the IRS stated that ``under 
existing GSA Federal Supply Schedule, FSS, contracting procedures, it 
cannot set a specific number of awards aside for contractors employing 
significant numbers of persons with disabilities,'' only for the one 
disabled employer who may never hire another disabled person.
  This is an oversight in our law which needs to be corrected. It makes 
no sense that current law provides an employment opportunity for ONE 
disabled person, while this initiative would create opportunities for 
hundreds--if not thousands--of people who are disabled and without a 
college education.
  Mr. Speaker, as I mentioned previously, there is particular concern 
over the group of young, disabled veterans who have few employment 
options. Most able-bodied soldiers without formal education, upon 
leaving service, take positions as bus drivers, cafeteria workers, 
janitorial services, or security personnel. If the Disability 
Preference Program is not enacted soon, a viable opportunity will be 
lost.
  This initiative is supported by the Disabled American Veterans, the 
American Legion, the American Legion Auxiliary, the American 
Association of People With Disabilities, the One Percent Coalition, and 
the National Rehabilitation Association. In addition, the language has 
been passed by the other body on numerous occasions.
  I ask my colleagues in the House to join with me in supporting the 
Disability Preference Program for Tax Collection Contracts. I ask them 
to join me in providing meaningful employment opportunities for persons 
with disabilities and for our returning soldiers who have been disabled 
in the line of duty.
  Ms. McCOLLUM of Minnesota. Mr. Speaker, I rise today in support of 
the Tax Collection Responsibility Act of 2007. This legislation will 
put a stop to the use of private debt collection agencies to collect 
federal income taxes and ensure that this critical government function 
is performed by public servants on behalf of American taxpayers.
  The small proportion of individuals who do not pay their taxes does 
increase the burden for the rest of the responsible, law-abiding 
Americans. In 2004 Congress attempted to hold these people accountable 
by authorizing a pilot private debt collection program for debts owed 
to the Internal Revenue Service. While this program was intended to be 
a more efficient way to collect unpaid taxes, it has proven to be a 
failure.
  We have found that some of the private debt collection agencies are 
nothing short of bounty hunters, who use harassment to collect debts. 
Our constituents deserve to know that the person contacting them on 
behalf of the Federal Government is a public-servant, who is held to 
the highest standards of accountability and confidentiality, not a 
person whose paycheck depends solely on the number of collections they 
make.
  In addition to the use of heavy-handed and abusive tactics to collect 
unpaid taxes, private tax collection agencies have also shown 
themselves to be significantly less efficient than the IRS agents who 
should be doing this work in the first place. This program has cost the 
American taxpayers $71 million, but has only collected $20 million, for 
a net loss of over $50 million. The IRS's National Taxpayer Advocate 
testified that for the same $71 million investment, the IRS would have 
collected around $1.4 billion. It simply does not make sense to waste 
public funds in this manner.
  The Republican motion to recommit on this legislation would add to 
the bill a wholesale repeal of the estate tax. Repealing the estate tax 
would be fiscally irresponsible and break the promise this Congress 
made to the American people to work towards a balanced budget. Since 
its adoption would make the bill violate the House PAYGO rules, this 
motion is clearly nothing more than a political move to kill the 
underlying bill. This motion to recommit shows where the Republican 
Party's priorities are; the estate tax currently affects less than two 
percent of the wealthiest estates. A full repeal would require that 
taxes on millions of working Americans be raised and that Social 
Security and Medicare benefits for American seniors be reduced. I will 
continue to support a responsible approach to reducing the estate tax 
that provides relief for families without burdening future generations 
with additional deficit spending.
  Mr. Speaker, it is unacceptable that the IRS outsources a function as 
central to the Federal Government as tax-collection. I urge my 
colleagues to join me in supporting H.R. 3056.
  Mr. POMEROY. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 719, the previous question is ordered on 
the bill, as amended.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


               Motion to Recommit Offered by Mr. Hulshof

  Mr. HULSHOF. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. HULSHOF. I am opposed to the bill in its current form.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. Hulshof of Missouri moves to recommit the bill H.R. 
     3056 to the Committee on Ways and Means with instructions to 
     report the same back to the House promptly with the following 
     amendment:
       At the end of the bill, add the following:

     SEC. 9. ESTATE TAX REPEAL MADE PERMANENT.

       Section 901 of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 shall not apply to title V of such 
     Act or to amendments made by title V of such Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Missouri is recognized for 5 minutes in support of his motion.
  Mr. HULSHOF. Mr. Speaker, I rise to offer this motion to recommit to 
the underlying bill, the Tax Collection Responsibility Act.
  The motion to recommit would actually incorporate H.R. 2380, which is 
a bill for which I am the original sponsor. It is a bipartisan bill, 
and I would hope that my colleagues on the other side of the aisle, 
especially those who have cosponsored the bill, would see fit to 
support this motion to recommit.
  Since I have these few moments, and I see the distinguished chairman 
of the committee who may be responding, let me anticipate some points 
or questions perhaps and try to respond to them.
  We may hear the question: Why are we doing the death tax repeal now?
  Well, three times in the last session of Congress did we have the 
opportunity to debate this issue and vote on it. Again, this House in a 
bipartisan fashion voted to completely, permanently repeal the death 
tax.
  I am not certain under the new majority that we will have that 
opportunity or not. There is a policy rationale for considering this 
measure now. One is the certainty.
  As the Speaker knows, right now there is a $2 million exemption, a 45

[[Page 27013]]

percent rate, a very punitive rate. That exemption in 2010 goes up to a 
complete repeal, and there is lack of certainty, especially those 
family businesses that are looking to plan on how to dispose of those 
assets. So I think now is an appropriate time.
  We may hear from my good friend, the chairman of the Ways and Means 
Committee, is this bill paid for. And I would suggest first of all that 
there is no budgetary impact in fiscal year 2009. We are looking beyond 
January 1, 2011, before any budgetary impact. And I would quote the 
chairman of the Ways and Means Committee who at least has been quoted 
in the paper as saying he is ready to tackle some big, tough issues, 
like the alternative minimum tax. The permanent death tax repeal is 
significantly less loss of revenue to the government than repealing the 
AMT.
  He has talked about fairness and equity. I can think of nothing 
fairer than to get rid of this very punitive tax.
  We may hear from the other side, as traditionally we do, this is 
something that only a handful of individuals face, or that this is for 
millionaires only. My rejoinder to that is then why is every small 
business group in America, whether it be the National Federation of 
Independent Business, whether it be every business group that 
represents minority interests, the Hispanic Chamber of Commerce, the 
African American Chamber of Commerce in the past, all have supported 
complete repeal, final repeal of this very punitive tax.
  Let me talk a little bit about the values of this.
  This is the land of opportunity, is it not? The old adage is, if you 
build a better mousetrap, the world will beat a path to your door. The 
only thing guaranteed, of course, in America is the guarantee of 
freedom and liberty and the opportunity to achieve whatever it is you 
dream about.
  Let me tell you a very personal story of a dream of a young couple. A 
young, strapping man left home in 1956 with his new bride in tow. They 
had $1,000 to their name. That is what his father had given him to go 
make his way into the world. And so they settled in Mrs. Emerson's 
district in southeast Missouri, and they worked very hard to build a 
farm.
  Over the course of those many years, this couple had a son, an only 
son. That individual is the one the Chair has recognized here today.
  They built this family business, a family-owned farm, 500 acres, 
three tractors, a used combine, the farmhouse where I grew up. And so 
it was, of course, the unfortunate reality of life, and that is we meet 
our heavenly reward. My dad passed on the anniversary of John F. 
Kennedy's death on November 22, 5 years ago this November. Mom survived 
another 17 months after that.
  I am sitting there across the mahogany desk from our old, long-time 
family accountant who had an old adding machine with a tape in it, and 
he is plugging in a value for all of these assets that my parents had 
already been taxed on, whose assets were to help put food on the table. 
Suddenly I broke out in a cold sweat because I knew when he hit the 
total button, that figure was going to be above or below an arbitrary 
line, a line set by this body.
  Mr. Speaker, death of a family member should not be a taxable event, 
and the fact is if Congress fails to do anything with the current 
regime, virtually every small business in America in 2011 is going to 
be facing this very punitive tax. I urge an ``aye'' vote on the motion 
to recommit.
  Mr. POMEROY. Mr. Speaker, I rise to claim the time in opposition to 
the motion.
  The SPEAKER pro tempore. The gentleman from North Dakota is 
recognized for 5 minutes.
  Mr. POMEROY. Mr. Speaker, my friend is an articulate and forceful 
advocate. And we are all moved by the story of his time with the 
accountant, but they did not owe a tax. And basically, there is a 
figure missing from the motion to recommit he brings before us today, a 
very important figure: The cost of what the underlying motion to 
recommit would require. That figure is $498.8 billion. Now, we are a 
Nation of $9 trillion of debt, $9 trillion of debt, and they bring 
forward a proposal that would add another $498.8 billion, and they fail 
to say anything about how they are going to pay for it in their motion.
  Well, obviously serious-minded legislators like my friend would not 
bring forward a serious proposal about repeal of the estate tax without 
some means of paying for it, and that is really what the heart of this 
motion is. It is not a real estate tax motion. This is a kill-the-
underlying-bill motion.
  The other side has some different priorities. Last week they were 
against SCHIP, expanding health insurance to uninsured kids. This week 
they are basically for privatizing debt collection of IRS debt. You 
like what Blackwater is doing in Iraq; you're going to love sending IRS 
debt to private bill collectors here.

                              {time}  1715

  Because they aren't going to prevail on the debate itself, they want 
to keep the vote from happening at all, which is what the underlying 
motion to recommit does, sends it promptly back to the Ways and Means 
Committee, which means the underlying bill is not before the House for 
a vote.
  Mr. Speaker, to further use the time in our opposition to the motion 
to recommit, it is my honor to yield to the chairman of the Ways and 
Means Committee, Mr. Rangel from New York.
  Mr. RANGEL. Mr. Speaker, I came to the floor to hear the gentleman 
from Missouri (Mr. Hulshof) who's an outstanding member of the Ways and 
Means Committee and I appreciate his contribution to the committee. I 
was moved by his story of the hardship that he felt as a result of the 
estate tax.
  What the heck that has got to do with collecting debts that is owed 
to the Internal Revenue, I have no idea. If you're suggesting that we 
kill the bill that eliminates bounty hunters from working on commission 
and unfairly leaning and putting pressure on people who owe the Federal 
Government, that's one thing. If you want us to just substitute that 
and take back to the committee your idea about what we should do with 
the estate tax, well, you know as well as I do that we have to find out 
how much money do we lose, where do we raise the money, and do it in a 
Republican-Democratic fiscal fashion to say, hey, I want to reduce 
taxes here and raise it someplace else, maybe on the kids, maybe on a 
little tobacco, maybe whatever makes you feel good, but don't kill 
something with a parliamentary motion. It's not the right thing to do.
  I think the subject matter that you discuss does warrant some 
discussion, someplace, at some time, but to imply that we should report 
back promptly, how promptly should we deal with the question of estate 
tax or estate tax repeal? Where do we get the half a billion dollars? 
These are things that I think should be in another day and another 
time.
  Right now, we're talking about a great bill that if you kill this 
bill through a parliamentary procedure, which is all we're talking 
about, then the small business people that have been collecting 
government taxes, they're going to get hit. The citizens that we have 
in the Virgin Islands that are treated unfairly with the statute of 
limitations, they're going to get hit.
  And the people who really believe that if you have to deal with your 
government, if you have to deal with the Treasury Department, if you 
have to deal with the Internal Revenue, for God's sake, deal with a 
civil servant whose mortgage payment is not dependent on how much money 
he can get out of you. Deal with someone that's been trained by the 
United States Government to collect money that's owed to the United 
States Government and not some company that has been created to fill 
the need because some people believe that the private sector can always 
but always do it best.
  I do hope that when the committee has something to discuss as 
important as estate tax, why not discuss estate tax when it's time to 
do it.
  Mr. POMEROY. Mr. Speaker, I yield back my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.

[[Page 27014]]

  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. HULSHOF. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  Pursuant to clause 9 of rule XX, the Chair will reduce to 5 minutes 
the minimum time for any electronic vote on the question of passage of 
the bill.
  The vote was taken by electronic device, and there were--yeas 196, 
nays 212, not voting 23, as follows:

                             [Roll No. 959]

                               YEAS--196

     Aderholt
     Akin
     Altmire
     Bachmann
     Bachus
     Barrett (SC)
     Barrow
     Bartlett (MD)
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono
     Boozman
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Culberson
     Davis (KY)
     Davis, David
     Davis, Tom
     Deal (GA)
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Ellsworth
     Emerson
     English (PA)
     Fallin
     Feeney
     Ferguson
     Flake
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Giffords
     Gilchrest
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Hall (TX)
     Hastings (WA)
     Hayes
     Heller
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hulshof
     Hunter
     Inglis (SC)
     Issa
     Johnson, Sam
     Jones (NC)
     Jordan
     Kagen
     Keller
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline (MN)
     Knollenberg
     Kuhl (NY)
     LaHood
     Lamborn
     Lampson
     Latham
     LaTourette
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Mahoney (FL)
     Manzullo
     Marchant
     Matheson
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris Rodgers
     McNerney
     Mica
     Miller (FL)
     Miller (MI)
     Moran (KS)
     Murphy, Tim
     Musgrave
     Myrick
     Neugebauer
     Paul
     Pearce
     Pence
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roskam
     Royce
     Ryan (WI)
     Sali
     Saxton
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shays
     Shimkus
     Shuster
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Souder
     Space
     Stearns
     Sullivan
     Tancredo
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walberg
     Walden (OR)
     Walsh (NY)
     Wamp
     Weldon (FL)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--212

     Abercrombie
     Ackerman
     Allen
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Castor
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Cramer
     Crowley
     Cuellar
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Donnelly
     Doyle
     Edwards
     Ellison
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Frank (MA)
     Gillibrand
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind
     Klein (FL)
     Kucinich
     Langevin
     Lantos
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Markey
     Marshall
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Perlmutter
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Richardson
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stupak
     Tanner
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wexler
     Woolsey
     Wu
     Wynn
     Yarmuth

                             NOT VOTING--23

     Alexander
     Baker
     Bean
     Boren
     Calvert
     Carson
     Cubin
     Cummings
     Everett
     Hastert
     Jindal
     Johnson (IL)
     Johnson, E. B.
     Larsen (WA)
     Maloney (NY)
     Miller, Gary
     Nunes
     Peterson (PA)
     Reichert
     Rogers (KY)
     Simpson
     Sutton
     Wilson (OH)

                              {time}  1742

  Messrs. CARNEY, LOEBSACK, MELANCON, MURPHY of Connecticut, ROTHMAN, 
CUELLAR and Ms. SCHAKOWSKY changed their vote from ``yea'' to ``nay.''
  Mr. KAGEN and Ms. GIFFORDS changed their vote from ``nay'' to 
``yea.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. RYAN of Wisconsin. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 232, 
noes 173, not voting 26, as follows:

                             [Roll No. 960]

                               AYES--232

     Abercrombie
     Ackerman
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Bishop (UT)
     Blumenauer
     Boswell
     Boucher
     Boyda (KS)
     Brady (PA)
     Brown, Corrine
     Butterfield
     Capito
     Capps
     Capuano
     Carnahan
     Carney
     Castor
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Conaway
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Crowley
     Cuellar
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Tom
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Donnelly
     Doyle
     Edwards
     Ellison
     Ellsworth
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Ferguson
     Filner
     Frank (MA)
     Gerlach
     Giffords
     Gillibrand
     Gohmert
     Gonzalez
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Hayes
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Jones (NC)
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kind
     Klein (FL)
     Kucinich
     LaHood
     Langevin
     Lantos
     Larson (CT)
     LaTourette
     Lee
     Levin
     Lewis (GA)
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Manzullo
     Markey
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McCotter
     McDermott
     McGovern
     McHugh
     McIntyre
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (MI)
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murphy, Tim
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Perlmutter
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Richardson
     Rodriguez
     Rogers (MI)
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Saxton
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Shimkus
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder

[[Page 27015]]


     Solis
     Space
     Spratt
     Stark
     Stupak
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wexler
     Wolf
     Woolsey
     Wu
     Wynn
     Yarmuth

                               NOES--173

     Aderholt
     Akin
     Bachmann
     Bachus
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono
     Boozman
     Boustany
     Boyd (FL)
     Brady (TX)
     Braley (IA)
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Carter
     Castle
     Chabot
     Coble
     Cole (OK)
     Cramer
     Crenshaw
     Culberson
     Davis (KY)
     Davis, David
     Davis, Lincoln
     Deal (GA)
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Fallin
     Feeney
     Flake
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gilchrest
     Gingrey
     Goode
     Goodlatte
     Gordon
     Granger
     Graves
     Hall (TX)
     Hastings (WA)
     Heller
     Hensarling
     Herger
     Herseth Sandlin
     Hobson
     Hoekstra
     Hulshof
     Hunter
     Inglis (SC)
     Issa
     Johnson, Sam
     Jordan
     Keller
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline (MN)
     Knollenberg
     Kuhl (NY)
     Lamborn
     Lampson
     Latham
     Lewis (CA)
     Lewis (KY)
     Linder
     Lucas
     Lungren, Daniel E.
     Mack
     Marchant
     Marshall
     McCarthy (CA)
     McCaul (TX)
     McCrery
     McHenry
     McKeon
     McMorris Rodgers
     Mica
     Miller (FL)
     Moran (KS)
     Musgrave
     Myrick
     Neugebauer
     Paul
     Pearce
     Pence
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Renzi
     Reynolds
     Rogers (AL)
     Rohrabacher
     Ros-Lehtinen
     Roskam
     Royce
     Ryan (WI)
     Sali
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shays
     Shuster
     Smith (NE)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Tancredo
     Tanner
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walberg
     Walden (OR)
     Walsh (NY)
     Wamp
     Weldon (FL)
     Weller
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Young (AK)
     Young (FL)

                             NOT VOTING--26

     Alexander
     Baker
     Bean
     Boren
     Calvert
     Cardoza
     Carson
     Cubin
     Cummings
     Doggett
     Everett
     Hastert
     Jindal
     Johnson (IL)
     Johnson, E. B.
     Kilpatrick
     Larsen (WA)
     Maloney (NY)
     Miller, Gary
     Nunes
     Peterson (PA)
     Reichert
     Rogers (KY)
     Simpson
     Sutton
     Wilson (OH)


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised that 2 
minutes remain in this vote.

                              {time}  1750

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________