HEARING: Hearing on Internal Revenue Service’s Use of Private Debt Collection Companies to Collect Federal Income Taxes
FOCUS OF THE HEARING:
On March 22, 2007, Committee Chairman Rangel launched an investigation into the IRS’s use of private debt collection companies citing complaints from taxpayers, instances of harassment and violations of law, and the inability of taxpayers to hold the Federal government liable for the actions of a collection contractor. Further, Chairman Rangel urged the Commissioner not to proceed with awarding additional contracts.
The Committee will focus on issues related to whether: (1) federal income tax collection is a fundamental governmental function and, as such, should not be contracted to the private sector as a profit-making venture; (2) the IRS can collect federal income taxes more efficiently and effectively than private debt collection companies; (3) taxpayers are subject to confusion, questionable private debt collection company tactics, harassment, and abuse due to the use of private debt collectors; (4) adequate options are available to the IRS to address uncollected taxes in the accounts receivable inventory; (5) the program is ready for expansion and new private debt collection contracts should be awarded in the coming months; and (6) Internal Revenue Code section 6306 should be repealed.