Washington, D.C. - Mr. Speaker today I am introducing the Taxpayer Abuse Prevention Resolution of 2003, a resolution expressing the sense of Congress that private sector debt collection agencies should not be paid on a commission basis or as a percent of the amount of federal taxes they collect.
The Internal Revenue Service has proposed paying private debt collectors a 25 percent commission to collect unpaid tax debt. That proposal will jeopardize the rights and privacy of American taxpayers. The following organizations oppose the IRS proposal and have expressed their strong support for this important consumer protection legislation I am introducing today: Citizens for Tax Justice, Consumer Federation of America, Consumers Union, National Consumer Law Center, National Consumers League.
Two pilot projects were authorized by Congress to test private collection of tax debt for 1996 and 1997. The 1996 pilot was such a failure that the 1997 project was cancelled. Contractors violated the Fair Debt Collection Practices Act (FDCPA) and did not protect the security of personal taxpayer information. An IRS Internal Audit Report found that contractors made hundreds of calls to taxpayers during times prohibited by the FDCPA, and that calls were even placed as early as 4:19 a.m.
The Administration's proposal to privatize tax collection services flies in the face of Section 1204 of the IRS Reform and Restructuring Act of 1998, which specifically prevents IRS employees from being evaluated on the basis of the amount of taxes they collect in order to eliminate incentives to use overly aggressive tax collection techniques. Despite concerns about aggressive collection techniques, the Administration now wants to pay private debt collectors $3.25 billion in commissions to collect taxes that IRS employees could collect for roughly one-tenth of that amount.
Paying private debt collectors on a commission basis will be costly and will threaten the rights and privacy of the American taxpayers. We must ensure, as this resolution seeks to do, that federal tax collection functions will not be handed over to private sector bounty hunters. Our constituents deserve that assurance.
Mr. Speaker, American taxpayers need to know that their government works for them, not against them. I urge this Congress to pass the Taxpayer Abuse Prevention Resolution of 2003.