An amendment to the Transportation, Treasury appropriations
bill for 2005 prohibits the Internal Revenue Service from
contracting out tax collection.
Rep. Shelley Moore Capito, R-W.Va., sponsored the amendment
and said the inherent potential for harm in the use of
private debt collectors “should be cause for alarm.”
Debate on the amendment demonstrated “strong bipartisan
support,” for blocking IRS from using funds to contract
with private debt collectors, according to the National
Treasury Employees Union.
It cited an audit from the Treasury Inspector General for
Tax Administration that found that the “lack of oversight
of contractors resulted in serious security vulnerabilities,”
and that “contractors blatantly circumvented IRS policies
and procedures even when security personnel identified
inappropriate practices.”
The proposal would have paid debt collectors a 25 percent
bounty for money collected, something NTEU said does not
make fiscal sense given IRS estimates that “a modest
increase in enforcement resources” could yield $9 billion
in collected debt.
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