Bush Signs Bill Authorizing IRS Contracting

MINNEAPOLIS, MN – On Oct. 22, 2004, President Bush signed the Jumpstart Our Business Strength (JOBS) bill into law. The legislation (H.R. 4520) is designed to lift European Union trade sanctions by repealing a $50 billion subsidy to U.S. exporters. The law replaces it with $137 billion in corporate tax cuts plus a $10 billion buyout of tobacco farmers, according to CQ.Today.

The president?s signature on H.R. 4520 delivers a major legislative victory for the credit and collection industry. As part of the new law, the Internal Revenue Service (IRS) is now authorized to contract certain federal income tax collection activities to private collection agencies (PCAs). The IRS estimates between $76 billion and $112 billion of the backlogged accounts is readily collectable. Currently, many uncontested cases are not pursued by IRS agents for over a year due to significant workload backlogs.

On behalf of the credit and collection industry, ACA International (ACA) has been a vocal advocate for the need and economic benefit of the contracting program. ?We are very pleased with the passage of the IRS contracting program,? said Rozanne Andersen, ACA general counsel and senior vice president of legal and government affairs. ?The IRS will now have access to cutting-edge technology and expert collection techniques by partnering with the private sector.?

The private debt collection industry has worked successfully with federal government agencies and with most of the states for many years. ?Private collection agencies have returned hundreds of millions of dollars to the U.S. Department of Education, the U.S. Department of Health and Human Services, as well as state treasuries and municipalities,? said Andersen.

The IRS contract initiative is a proposal to leverage the resources of PCAs with minimal investment of taxpayer dollars, while providing maximum protection of taxpayers? rights. It is an important piece of a comprehensive effort to reorganize, streamline and improve collection outcomes. Since 1998, the IRS has worked with experts, including ACA and ACA member companies, to study and design the best method to implement the program.

Under the proposal, PCAs would perform supplemental collection activities, subject to the oversight and control of the IRS, and in compliance with all applicable laws and regulations. The power to make decisions that impact the rights of individual taxpayers shall remain solely with the IRS. Under the program, PCAs will be embedded in the IRS collection scheme, not working outside or independent from it.

Click here for more information on the IRS contracting program and tips on how to become an eligible government contractor.

ACA International, formerly known as the American Collectors Association, is the association of credit and collection professionals. Founded in 1939, ACA International has approximately 5,300 members, including third-party collection agencies, attorneys, credit grantors and vendor affiliates. Headquartered in Minneapolis, ACA International serves members in the United States, Canada and 58 other countries worldwide. For more information on ACA International visit www.acainternational.org.