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Washington, Oct 10, 2007 -

Madam 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, Madam 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.