I 

109TH CONGRESS 

1ST SESSION H. R. 1621 

To amend the Internal Revenue Code of 1986 to repeal the authority of 

the Secretary of the Treasury to enter into private tax collection contracts. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 13, 2005 

Mr. SIMMONS (for himself, Mr. VAN HOLLEN, Mrs. CAPITO, Mr. FERGUSON, 

Mr. ROGERS of Michigan, Mr. WILSON of South Carolina, Mr. HOEKSTRA, Mrs. MILLER of Michigan, Mr. GERLACH, Mr. MCCOTTER, Mr. 

MCHUGH, Mr. SHIMKUS, Mr. DAVIS of Kentucky, Mr. SMITH of New 

Jersey, Mr. PITTS, Mr. LOBIONDO, Mr. HAYES, Mr. HOYER, Mr. MORAN

of Virginia, Ms. KILPATRICK of Michigan, Ms. ROYBAL-ALLARD, Ms. 

LINDA T. SA ́NCHEZ of California, Mr. CARDIN, Ms. NORTON, Mr. 

BISHOP of New York, Mr. PRICE of North Carolina, Mr. COOPER, Mr. 

TIBERI, Mr. HOLT, Mr. RANGEL, Mr. FRANK of Massachusetts, Ms. 

FOXX, and Mr. LATOURETTE) introduced the following bill; which was 

referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to repeal 

the authority of the Secretary of the Treasury to enter 

into private tax collection contracts. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; FINDINGS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Taxpayer Protection Act of 2005’’. 
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1 (b) FINDINGS.—The Congress finds the following: 

2 (1) The integrity of the Federal tax system is 

3 integral to the efficient and ongoing functioning of 

4 representative democracy. 

5 (2) A pillar of exemplary citizenship is compli6 ance with the Federal tax code as it pertains to indi7 vidual income taxes. 

8 (3) Individual taxpayers voluntarily disclose 

9 sensitive personal information to the Federal Gov10 ernment with the expectation that such information 

11 will be utilized and retained only by qualified, 

12 trained, and accountable personnel of the Internal 

13 Revenue Service (IRS) . 

14 (4) Although the IRS has stated that there will 

15 be tight restrictions on what information will be re16 leased to private collection agencies, the statute 

17 places no restrictions on what information may be 

18 released to private collection agencies. 

19 (5) More than 26 million Americans have, since 

20 1990, been victims of some form of ‘‘identity theft’’ 

21 through misappropriation and misuse of their per22 sonal information. 

23 (6) Disclosure of taxpayer information to non24 governmental, third party vendors will increase the 
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1 risk of wrongful disclosure of taxpayer information 

2 that results in higher incidences of ‘‘identity theft’’. 

3 (7) The IRS has already demonstrated its in4 ability to protect taxpayer data from unauthorized 

5 disclosure under existing vendor contracts as docu6 mented in an internal report by the Department of 

7 Treasury Inspector General for Tax Administration. 

8 (8) The IRS Restructuring and Reform Act of 

9 1998 specifically prevents employees or supervisors 

10 at the IRS from being evaluated or compensated 

11 based on how much they collect in order to prevent 

12 incentives for overly aggressive and abusive tactics. 

13 (9) The compensation scheme for private tax 

14 collection agencies is a recovery fee of up to 25 per15 cent of funds collected that will lead to overzealous 

16 and abusive collection tactics against taxpayers. 

17 (10) The Congress has previously rejected the 

18 use of private tax collection agencies by canceling a 

19 pilot program in 1996 due to violations by private 

20 collection agencies of the Fair Debt Collection Prac21 tices Act, inadequate protection of sensitive taxpayer 

22 information, and a loss of approximately $17 million 

23 during the pilot program. 

24 (11) A 2002 report by the IRS Commissioner 

25 to the IRS Oversight Board identified an additional 
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1 $30 billion in taxes owed that could be collected an2 nually by increased funding for IRS personnel. A $9 

3 billion annual increase in revenue could be achieved 

4 by earmarking approximately $300 million to spe5 cific IRS collection functions, for a return of $30 for 

6 every $1 spent. 

7 (12) Due to the vagaries of the budget scoring 

8 process, additional funds collected by IRS personnel 

9 do not ‘‘score’’ as increased revenues. 

10 (13) The use of private collection agencies was 

11 deemed a ‘‘new tool’’ to the IRS Commissioner that 

12 resulted in increased revenue being ‘‘scored’’ to the 

13 Federal Government when such activity would actu14 ally result in increased cost to taxpayers. 

15 (14) Members of the House of Representatives 

16 were not afforded the opportunity to specifically vote 

17 on this significant policy change during consider18 ation of H.R. 4520, the American Jobs Creation Act 

19 of 2004, in the 108th Congress. 

20 SEC. 2. REPEAL OF AUTHORITY TO ENTER INTO PRIVATE 

21 TAX COLLECTION CONTRACTS. 

22 (a) IN GENERAL.—Subchapter A of chapter 64 of the 

23 Internal Revenue Code of 1986 (relating to collection) is 

24 amended by striking section 6306. 

25 (b) CONFORMING AMENDMENTS.— 
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1 (1) Subchapter B of chapter 64 of such Code 

2 is amended by striking section 7433A. 

3 (2) Section 7809(a) of such Code is amended 

4 by striking ‘‘6306,’’. 

5 (3) Section 7811 of such Code is amended by 

6 striking subsection (g). 

7 (4) Section 1203 of the Internal Revenue Serv8 ice Restructuring Act of 1998 is amended by strik9 ing subsection (e). 

10 (5) The table of sections of subchapter A of 

11 chapter 64 of such Code is amended by striking the 

12 item relating to section 6306. 

13 (6) The table of sections of subchapter B of 

14 chapter 64 of such Code is amended by striking the 

15 item relating to section 7433A. 

16 (c) EFFECTIVE DATE.—The amendments made by 

17 this section shall take effect on the date of the enactment 

18 of this Act but shall not apply to any contract entered 

19 into before such date. 

20 (d) TERMINATION OF REPORTING REQUIREMENT.— 

21 The reporting requirement of section 881(e) of the Amer22 ican Jobs Creation Act of 2004 shall not apply after the 

23 date of the enactment of this Act. 

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