(WASHINGTON, D.C.) — Legislation introduced by U.S. Senators Patty Murray (D-WA) and Byron Dorgan (D-ND) and a more than a dozen Senate colleagues Thursday would stop the Internal Revenue Service (IRS) from using private debt collectors to collect unpaid taxes.
The legislation would make law a recommendation from the IRS’s own National Taxpayer Advocate, Nina Olson, who just last week strongly recommended that the practice be halted.
Murray and Dorgan objected to the plan last year when it first surfaced. Both pointed to the inherent violation of privacy involved in turning over confidential IRS information to private businesses, and an ill-fated 1996 attempt by the IRS to use private debt collectors which resulted in security violations, inappropriate collection activities and huge costs to collect debt compared to the cost of using professional IRS employees.
“I’m deeply concerned that the plan to outsource debt collection would neither adequately protect privacy nor guarantee any cost savings to the U.S. Treasury,” Senator Murray said. “I have been fighting this program since its inception because it threatens the American taxpayer’s rights to fair treatment and outsources essential government functions. I am proud to work with Senator Dorgan on this legislation to put an end to the Administration’s irresponsible and ineffective plan.”
“Everyone needs to pay the taxes they owe,” Dorgan said. “This legislation is not an effort to coddle those who do not. But the IRS is responsible for collecting taxes and protecting the confidentiality of every American’s tax information and the IRS’s use of private debt collectors falls short on both scores.”
The IRS says it needs to contract out debt collection services because of a lack of personnel and resources and readily admits that trained IRS employees would collect far more tax revenues than private collectors working these cases. “If that’s the situation, then we need to provide more people and more resources for them to do their job,” Dorgan said. “The answer is not to create a system filled with opportunities for potential abuse and wholesale violation of confidential tax information.”
Joining Murray and Dorgan in sponsoring the bill are: Senators Barbara Mikulski (D-MD), Daniel Akaka (D-HI), Patrick Leahy (D-VT), Carl Levin (D-MI), Edward Kennedy (D-MA), Maria Cantwell (D-WA), Jay Rockefeller (D-WV), John Kerry (D-MA), Daniel Inouye (D-HI), Ben Cardin (D-MD) , Barbara Boxer (D-CA) Diane Feinstein (D-CA), Robert Menendez (D-NJ), Frank Lautenberg (D-NJ), and Joe Lieberman (ID-CT).
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