House panel votes to bar outsourcing of tax debt collections

Bills to repeal the Internal Revenue Services' authority to use private collection agencies to collect delinquent taxes and crack down on identify theft involving Social Security numbers were approved Wednesday by the House Ways and Means Committee.

The more controversial bill was the private tax collection measure, which passed 23-18 over Republican objections.

Democrats argued the bill was needed to get private collection agencies out of the business of dunning taxpayers, arguing that there have been many documented abuses by the private agencies, such as calling taxpayers more than 100 times in pursuit of a debt. They also said the IRS, given the proper resources, could do a better job.

But Republicans argued that the private firms have done a good job of going after delinquent taxpayers, and that by giving easier cases to private firms, IRS employees were freed up to go after the harder ones. Numerous Republican amendments were batted away by Democrats. House Ways and Means Chairman Charles Rangel, D-N.Y., said many of those GOP amendments would be considered in upcoming comprehensive tax legislation.

Approval of the Social Security number bill came on a 41-0 vote. The bill would make it harder to buy, sell or display Social Security numbers. Ways and Means Social Security ranking member Sam Johnson, R-Texas, said the Social Security number is widely used as a personal identification number and that 10 million people in the United States have reportedly been victims of identity theft using them.

"It is long past time for Congress to act," he said. House Ways and Means Social Security Subcommittee Chairman Michael McNulty, D-N.Y., said, "If we are serious about addressing this growing problem, we must stop giving access to our Social Security number to every Tom, Dick, or Harry who seeks it."

The bill would restrict the sale, purchase and public display of the SSN by government and business, to make it less accessible to identity thieves, while providing exceptions for legitimate and necessary uses of the number such as for tax returns and national security uses. The bill provides penalties of up to five years in prison or a $250,000 fine.