Today’s CCH daily Tax Headlines email newsletter reports that the Tax Collection Responsibility Bill of 2007 (H.R. 3056) was passed by the House yesterday by a vote of 232 to 173. This is good news! I have always said that outside collection agencies should not be collecting federal, or state, tax debt.
The article goes on to say “House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., said the bill is intended to stop so-called ‘bounty hunters’ from earning a commission by harassing taxpayers for money owed to the Treasury. IRS employees collect unpaid taxes at a much faster pace than PCAs, or about $20 collected for every $1 spent on collections, Democrats said.”
Linda Beale, a law professor who teaches tax courses at Wayne State University Law School, reports in her posting “Veto Threatened for End of Privatization of Tax Debt Collection” at A TAXING MATTER that "Bush's ‘senior advisers’ would recommend a veto if H.R. 3056, a bill to end privatization of federal tax debt collection, is enacted”, as it would be inappropriate to allow tax bills to go uncollected.
Linda points out quite correctly that “If we would provide the IRS the resources and personnel to do the debt collection directly, we could collect more money with less taxpayer cost”, and poses the following interesting question - “If the White House is so concerned about the inequity of taxpayers avoiding their obligation to make payment on tax debts, why isn't it lobbying Congress for adequate funding of IRS enforcement needs?” Good question, Linda!
BTW, TAX GIRL Kelly Phillips Erb points out that one of the three private collection agencies that currently dun delinquent taxpayers is a Texas law firm! Just a coincidence?
I will keep you up-to-date on further developments.