Fate of effort to block IRS private debt collection hinges on Senate

The House Wednesday is expected to pass a bill eliminating the authority of the IRS to use private debt collection companies to pursue small taxpayer debts, as opponents look to the Senate to stop the measure.

The IRS last year began assigning thousands of accounts of individuals who owe taxes to private debt collection companies, which can earn commissions of close to 25 percent for each dollar recovered.

The agency has said that because it lacks the manpower to recover the debts, the collection companies over 10 years can add up to $2 billion to federal coffers.

In the face of strong opposition by the National Treasury Employees Union, which represents many IRS employees, the program has become emblematic of what many Democratic lawmakers see as a broad overreliance by the Bush Administration on private contractors to do federal work.

Rep. Chris Van Hollen, D-Md., who co-sponsored the measure, said "prospects of the passage are good."

In the Senate, where a companion measure has yet to emerge from committee, prospects are dimmer. Senate Finance ranking member Charles Grassley, R-Iowa, opposes the bill and lawmakers such as Sen. Charles Schumer, D-N.Y., have indicated interest in a compromise.

Dan Drummond, a spokesman for the Tax Fairness Coalition, a group representing collection agencies with IRS contracts, said that opponents hope senators will block the bill or fashion a compromise where the program remains in place with some portion of the revenue tax collectors generate diverted to hire new IRS employees.

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

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

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    View
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    View
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    View
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    View
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    View
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    View
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    View

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