Bill that would Block IRS Collection Contracts Introduced in Senate

Staying on track with their original campaign promises of reform, the newly installed, Democratically empowered Senate is looking to block the IRS’s private debt collection program begun last year.

Senator Byron Dorgan of North Dakota introduced Senate bill S.335: “A bill to prohibit the Internal Revenue Service from using private debt collection companies, and for other purposes.”  What the title lacks in nuance and finesse it more than makes up for in straight-forwardness.

More than a dozen senators have signed on to sponsor the bill, including old favorites Ted Kennedy, Barbara Boxer, and John Kerry – but also some surprising names, like Joseph Lieberman.

The Senators’ biggest concern?  Privacy.  Many of these concerns were outlined last week in National Taxpayer Advocate Nina Olson’s annual report.  The Senators also expressed uncertainty of any real cost savings from the program. In announcing the proposed rollback, the senators also recalled a 1996 attempt by the IRS to use private debt collectors that resulted in security violations and inappropriate collection activities. The IRS has touted the training safeguards built into the current pilot program, which involves a trio of agencies.

S.335 was introduced on January 18.  It then made its way to the Committee on Finance.  If all goes as to the Democrats’ plan, the IRS contracts will be no more shortly after.