I 
108TH CONGRESS 
1ST SESSION H. R. 1169
To amend the Internal Revenue Code of 1986 to provide for the performance 
of certain tax collection services by contractors. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 11, 2003
Mr. HOUGHTON 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 provide 
for the performance of certain tax collection services 
by contractors.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. QUALIFIED TAX COLLECTION CONTRACTS. 
(a) CONTRACT REQUIREMENTS.—
(1) IN GENERAL.—Subchapter A of chapter 64 
of the Internal Revenue Code of 1986 (relating to 
collection) is amended by adding at the end the fol-
lowing new section:
‘‘SEC. 6306. QUALIFIED TAX COLLECTION CONTRACTS. 
‘‘(a) IN GENERAL.—Nothing in any provision of law 
shall be construed to prevent the Secretary from entering 
into a qualified tax collection contract. 
‘‘(b) QUALIFIED TAX COLLECTION CONTRACT.—For 
purposes of this section, the term ‘qualified tax collection 
contract’ means any contract which—
‘‘(1) is for the services of any person (other 
than an officer or employee of the Treasury Depart-
ment) to locate and contact any taxpayer specified 
by the Secretary, to request payment from such tax-
payer of an amount of Federal tax specified by the 
Secretary, and to obtain financial information speci-
fied by the Secretary with respect to such taxpayer, 
and 
‘‘(2) prohibits each person providing such serv-
ices under such contract from committing any act or 
omission which employees of the Internal Revenue 
Service are prohibited from committing in the per-
formance of similar services. 
‘‘(c) FEES.—The Secretary may retain and use an 
amount not in excess of 25 percent of the amount collected 
under any qualified tax collection contract for the costs 
of services performed under such contract. The Secretary 
shall keep adequate records regarding amounts so retained
and used. The amount credited as paid by any taxpayer 
shall be determined without regard to this subsection. 
‘‘(d) NO FEDERAL LIABILITY.—The United States 
shall not be liable for any act or omission of any person 
performing services under a qualified tax collection con-
tract. 
‘‘(e) CROSS REFERENCES.—
‘‘(1) For damages for certain unauthorized col-
lection actions by persons performing services under 
a qualified tax collection contract, see section 
7433A. 
‘‘(2) For application of Taxpayer Assistance 
Orders to persons performing services under a quali-
fied tax collection contract, see section 7811(a)(4).’’. 
(2) CONFORMING AMENDMENTS.—
(A) Section 7809(a) is amended by insert-
ing ‘‘6306,’’ before ‘‘7651’’. 
(B) The table of sections for subchapter A 
of chapter 64 of such Code is amended by add-
ing at the end the following new item:
‘‘Sec. 6306. Qualified Tax Collection Contracts.’’
(b) CIVIL DAMAGES FOR CERTAIN UNAUTHORIZED 
COLLECTION ACTIONS BY PERSONS PERFORMING SERV-
ICES
UNDER
QUALIFIED
TAX
COLLECTION
CON-
TRACTS.—
(1) IN GENERAL.—Subchapter B of chapter 76 
of such Code (relating to proceedings by taxpayers 
and third parties) is amended by inserting after sec-
tion 7433 the following new section: 
‘‘SEC. 7433A. CIVIL DAMAGES FOR CERTAIN UNAUTHOR-
IZED COLLECTION ACTIONS BY PERSONS 
PERFORMING SERVICES UNDER QUALIFIED 
TAX COLLECTION CONTRACTS. 
‘‘(a) IN GENERAL.—Subject to the modifications pro-
vided by subsection (b), section 7433 shall apply to the 
acts and omissions of any person performing services 
under a qualified tax collection contract (as defined in sec-
tion 6306(b)) to the same extent and in the same manner 
as if such person were an employee of the Internal Rev-
enue Service. 
‘‘(b) MODIFICATIONS.—For purposes of subsection 
(a)—
‘‘(1) Any civil action brought under section 
7433 by reason of this section shall be brought 
against the person who entered into the qualified tax 
collection contract with the Secretary and shall not 
be brought against the United States. 
‘‘(2) Such person and not the United States 
shall be liable for any damages and costs determined 
in such civil action.
‘‘(3) Such civil action shall not be an exclusive 
remedy with respect to such person. 
‘‘(4) Subsections (c) and (d)(1) of section 7433 
shall not apply.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter B of chapter 76 of such Code 
is amended by inserting after the item relating to 
section 7433 the following new item:
‘‘Sec. 7433A. Civil damages for certain unauthorized collection ac-
tions by persons performing services under a quali-
fied tax collection contract.’’.
(c) APPLICATION
OF TAXPAYER ASSISTANCE OR-
DERS
TO PERSONS PERFORMING SERVICES UNDER
A 
QUALIFIED TAX COLLECTION CONTRACT.—Section 7811 
of such Code (relating to taxpayer assistance orders) is 
amended by adding at the end the following new sub-
section: 
‘‘(g) APPLICATION TO PERSONS PERFORMING SERV-
ICES UNDER
A QUALIFIED TAX COLLECTION CON-
TRACT.—Any order issued or action taken by the National 
Taxpayer Advocate pursuant to this section shall apply to 
persons performing services under a qualified tax collec-
tion contract (as defined in section 6306(b)) to the same 
extent and in the same manner as such order or action 
applies to the Secretary.’’. 
(d) INELIGIBILITY OF INDIVIDUALS WHO COMMIT 
MISCONDUCT TO PERFORM UNDER CONTRACT.—Section
1203 of the Internal Revenue Service Restructuring Act 
of 1998 (relating to termination of employment for mis-
conduct) is amended by adding at the end the following 
new subsection: 
‘‘(e) INDIVIDUALS PERFORMING SERVICES UNDER A 
QUALIFIED TAX COLLECTION CONTRACT.— An individual 
shall cease to be permitted to perform any services under 
any qualified tax collection contract (as defined in section 
6306(b) of the Internal Revenue Code of 1986) if there 
is a final determination by the Secretary of the Treasury 
under such contract that such individual committed any 
act or omission described under subsection (b) in connec-
tion with the performance of such services.’’. 
(e) EFFECTIVE DATE.—The amendments made to 
this section shall take effect on the date of the enactment 
of this Act.
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