Statements on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - September 11, 2006)

BREAK IN TRANSCRIPT

Mrs. MURRAY. Mr. President, I am glad to join my colleague, Senator DORGAN, and other cosponsors, in introducing legislation which would prevent the use of private collection agencies by the Internal Revenue Service. As Ranking Member of the Transportation, Treasury, the Judiciary, HUD, and Related Agencies (TTHUD) Appropriations Subcommittee, I have consistently opposed allowing the IRS the authority to hire private debt collectors. During Subcommittee hearings with the IRS, I have had the opportunity to discuss this issue at length with the current IRS Commissioner, Mark Everson. What I have learned during those conversations has not changed my mind.

When Chairman BOND and I finally are allowed to bring the Fiscal Year 2007 Transportation/Treasury Appropriations bill to the Senate Floor, I intend to offer an amendment that would effectively prohibit the IRS from going forward with this initiative. My amendment will be very similar to the bill we introduce today and the language that is already included in the House-passed Transportation/Treasury bill. I would point out, that the House Transportation/Treasury bill cleared the House of Representatives with the support of more than 400 Members.

There is no question that people who owe back taxes must pay their debt to the government. At the same time, every taxpayer should have the right to interact with a professional IRS agent when it comes to dealing with contested tax liabilities.

I'm against the use of private collection agencies (PCAs) because, first, I don't believe that taxpayer privacy will be adequately protected. When the IRS attempted the use of PCAs once before in the 1990s, it was a dismal failure. The IRS has not had a good track record of protecting taxpayer information and the Treasury Department's performance in providing information security protections to protect data confidentiality has worsened.

Second, I am concerned that private debt collectors will not show the level of professionalism, sensitivity, and respect that taxpayers deserve. In 2005, the Federal Trade Commission received more consumer complaints about private debt collectors than any other industry.

Due to the nature of the debts that the IRS intends to transfer to PCAs, the likely result will be that these agencies will end up going after the most vulnerable taxpayers in our society. We should not allow a system to emerge where better-off taxpayers get the benefit of interacting with a professional IRS agent, while economically-disadvantaged taxpayers are relegated to the harassing tactics of private collection agencies.

Third, I am deeply concerned with the cost-effectiveness of this initiative. The IRS Commissioner, himself, testified that it would be more cost-effective for the IRS to collect these debts than to contract them out to PCAs. Initially, I am told that it will require 55 IRS personnel to oversee 75 private tax collectors. Taken as a whole, I have to wonder whether the Federal Treasury will really benefit at all from this initiative.

Finally, the IRS should not be moving ahead with this activity while Congress is still debating its merits. More than 400 Members of the House approved a bill that included a prohibition on outsourcing tax collection. The IRS should suspend this effort immediately until the Congress has debated its fate and reached a final judgment.

http://thomas.loc.gov