Congress cautioned on effects of debt collection bill

A bill that would prohibit delinquent tax debtors from receiving federal loans or contracts would place a heavy burden on the Internal Revenue Service and other federal agencies, witnesses told a House Government Reform subcommittee Tuesday.

Representatives of the General Accounting Office, the Office of Management and Budget and the Treasury Department expressed support for improved federal debt collection, but voiced concerns about H.R. 4181, introduced in April by Rep. Jim Turner, D-Tex., a member of the Subcommittee on Government Management, Information, and Technology.

Turner's bill expands the Debt Collection Improvement Act of 1996, which currently only applies to non-tax debt-such as housing, business and student loans-to include tax debt as well.

The bill would require the IRS to report the tax status of all applicants-individuals and businesses-for federal loans, loan guarantees, and contracts to the agency granting the loan or issuing the contract-a task many witnesses cautioned would overburden the already beleaguered tax agency.

"IRS currently does not have the systems that would enable it to consistently provide federal agencies with timely, accurate, and complete information on an individual's or business's tax delinquency status," said Cornelia M. Ashby, associate director of tax policy and administration issues at GAO.

"We could support the application of H.R. 4181 to the federal acquisition process only after IRS is able to determine in a matter of hours whether prospective federal contractors have delinquent tax debt," Ashby said.

According to the Treasury Department, delinquent tax debts amounted to $68.3 billion as of January 1999.

The bill defines delinquent tax status as any federal tax debt that hasn't been paid within 90 days of assessment.

Most witnesses suggested implementing a pilot program initially to help the IRS and other agencies figure out the best way to deal with the new administrative tasks required by the legislation.

Witnesses also cautioned members on the effect the bill could have on small businesses.

"Cash flow is an everyday problem for all businesses and especially small businesses. While large businesses have plentiful lines of credit, small businesses do not have the same access," testified Deidre A. Lee, acting deputy director for management at OMB.

Nearly 50 percent of delinquent businesses-most of them small businesses-were delinquent for more than one tax period, Ashby said.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.


When you download a report, your information may be shared with the underwriters of that document.