WASHINGTON – U.S. Rep. Benjamin L. Cardin, a member of the Ways & Means Committee, has co-sponsored legislation to end the practice of hiring private debt collection agencies to collect taxes from Americans.   In 2004, Congress passed legislation to privatize tax collection, a duty that had always been carried out by the Internal Revenue Service. (IRS).

The Taxpayer Protection Act, HR 1621, would repeal the authority of the Secretary of Treasury to hire private tax collection agencies.  The repeal legislation also would end the 25% recovery fee that is allowed private tax collectors as compensation.

“Throughout our more than 220 year history, the federal government has always assumed responsibility for tax collection. To privatize such a responsibility is to open it up to abuse,” said Rep. Cardin.

The Congressman stressed that more than 26 million Americans have been the victims of identity theft since 1990 through misuse of their personal information.

“I do not think we want private collection agencies to have access to personal information that should only be reserved for the federal government,” said Rep. Cardin.  “I believe most Americans want only qualified, trained and accountable personnel who work for the IRS to have access to their personal information.”

In a 2002 report, former IRS Commissioner Charles Rossotti stressed that the IRS is more efficient in collecting taxes.  His report stated that if Congress were to appropriate an additional $296 million to hire more IRS compliance employees, the IRS could collect an additional $9.47 billion -- a return of $30 for every $ spent.

The legislation has the support of the National Treasury Employees Union, which represents IRS employees.  “This bipartisan effort recognizes that hiring private debt collectors to do the important and highly confidential work of the IRS is a dangerous mistake and IRS employees are grateful for the broad Congressional support on this issue,” said Colleen M. Kelley, national president of the National Treasury Employees Union.