In the long legislative battle over allowing the IRS?s use of private collection agencies to collect back tax, the collection industry has scored a victory. After intense debate over the weekend, the U.S. Senate approved and passed HR 4520 (American Jobs Creation Act of 2004) Monday by a vote of 69-17 after the House had approved the bill on October 7. Contained in the extensive corporate and special-interest tax relief bill was language that allowed the IRS to contract with private debt collection agencies for the collection of back taxes.
Lawmakers inserted the pro-collection agency clause to make up for the nearly $140 billion in tax breaks contained in HR 4520. It is hoped that private agencies can bring in $1.4 billion in past due taxes over the next 10 years.
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