New Front Opened in War on IRS Private Collectors

Another attempt to kill the Internal Revenue Service private debt collection initiative has passed a U.S. House of Representatives committee and is attached to a high-profile bill intended to provide a temporary fix to a hot-button tax issue.

The House Ways and Means Committee passed Thursday HR 3996, a one-year fix to the alternative minimum tax (AMT), a measure that both Democrats and Republicans have vowed to enact. A provision eliminating the IRS’s authority to contract with private debt collectors was attached to the bill.

A major opponent of the IRS collection program, the National Treasury Employees Union (NTEU), reported this morning in a press release that the program is lagging behind projected revenue totals. The group said that in the program’s first year, private collectors have brought in $32.1 million, far short of the projected $45.7 to $65 million, although it is unclear whether the loss of one of the three original contractors was factored in to the numbers.

A Senate committee is considering a separate bill to kill the program (“House Votes to Kill IRS Collection Program; Veto Threatened,” 10/11).