Lawmakers write IRS in opposition to tax collections outsourcing plan

The lawmakers -- led by Reps. Rob Simmons, R-Conn., and Christopher Van Hollen, D-Md. -- warned that the plan could violate taxpayers' privacy rights, subject them to fraud or identity theft and prove too costly.

"[W]e oppose handing over up to 24 percent of the collected debts to those companies -- especially when the IRS can carry out these same activities with an overhead of only 3 percent," they wrote. "It is clear that this type of system would be ripe for abuse and harassment, and is a bad deal for all taxpayers."

The lawmakers also noted that the House-approved Transportation-Treasury spending bill for fiscal 2007 includes language that would bar IRS from contracting with private companies for tax collection and requested that the agency stop work on the program until the bill is signed into law.