Rothman Welcomes Taxpayer Advocate’s Call for Repeal of Administration's Decision to Privatize Tax Collection
January 9, 2007

Today, the National Taxpayer Advocate, Nina Olson, issued a report to Congress calling for the repeal of the Bush Administration's policy to outsource the collection of unpaid federal taxes to private debt collection agencies. Last year, Congressman Steve Rothman (D-NJ) sponsored the House-passed amendment to stop the IRS from spending any money on implementing its outsourcing program. Rothman's statement on Olson's recommendation follows:

"The Bush Administration's decision last year to begin handing 26,000 taxpayer files over to private, for-profit debt collection companies was wrong and irresponsible. This outsourcing program is estimated to cost tens of millions of dollars a year and has already allowed the most complained about industry in America to get hold of tax returns, which include taxpayers' Social Security numbers. I have long opposed this terrible program and I applaud the National Taxpayer Advocate's call for its repeal.

"As an independent office within the Internal Revenue Service, the National Taxpayer Advocate is dedicated to protecting taxpayers from any harm or abuse. The President should respect the American people enough to listen to Olson's advice and repeal his private debt collection program immediately. However, if the Administration refuses to end this mistake voluntarily, then the new Democratic-controlled Congress will act."

Click here for more information about Rep. Rothman’s past efforts to stop the administration's outsourcing plan.

Rangel Supports Ending Private Tax Collection
January 9, 2007

Today, the Internal Revenue Service’s (IRS) National Taxpayer Advocate called on Congress to end the use of private tax collection services. Ways and Means Chairman Charles B. Rangel issued the following statement in support of this recommendation:

“I am very encouraged that the Taxpayer Advocate seeks to end the use of private debt collectors. Private collectors are driven and paid by commission, costing the taxpayer additional money to do the same job an IRS official can do more efficiently. I will work with my colleagues on the Committee and with IRS officials to make good on this proposal and return the job of enforcing our volunteer tax laws to the trained, courteous professionals at the IRS.“

Serrano Supports Taxpayer Advocate’s Conclusions on IRS Debt Collection Outsourcing
January 10, 2007

Today, Congressman José E. Serrano, the newly-named chair of the Financial Services and General Government Subcommittee of the House Appropriations Committee, expressed his opposition to the IRS’s outsourcing of debt collection.

“I agree with the Taxpayer Advocate Service’s report which said that outsourcing the debt collections of the IRS is both wasteful and inefficient,” Serrano said. “This program privatizes a function of the IRS without any added cost-effectiveness. Paying up to 25 cents on the dollar collected by the private debt collection agencies takes much-needed revenue away from the federal government, which could do the work more efficiently. I do not believe in outsourcing simply for outsourcing’s sake especially when it is more costly to taxpayers.”

The IRS began this program in September 2006, with Congressional authorization. The IRS has a collections budget of nearly $2 billion with thousands of employees—allowing them to complete this work far more efficiently than by outsourcing it. According to the Taxpayer Advocate Service, the IRS currently has at least 65 employees monitoring the work of the outside collections agencies, who in turn have approximately 75 employees working on the cases.