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:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care


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