Sutton Leads Effort to Provide Tax Assistance to Working Families

Mr. Speaker, H. Res. 1102 provides for consideration of H.R. 5719, the Taxpayer Assistance and Simplification Act of 2008, under a closed rule. The rule provides for 1 hour of debate on the bill controlled by the Committee on Ways and Means. Mr. Speaker, today, April 15, is Tax Day, which has long been a source of stress and anxiety for many working families. However, today we will bring good news. We will consider legislation that will alleviate many of the tax-related difficulties Americans face today and throughout the year. This legislation will streamline the tax filing process for individuals and businesses as well as improve IRS customer service and strengthen privacy protections. The Taxpayer Assistance and Simplification Act is also fully paid for by ensuring funds from tax-advantaged health savings accounts will be used for qualified health care expenses, and by temporarily delaying a withholding requirement on government payments to contractors. It also contains provisions to strengthen the integrity of the Tax Code, making it simpler and fairer for all Americans. It eliminates incentives for U.S. companies to outsource work by ensuring they cannot escape paying employment taxes on government workers. In addition, this legislation will also prevent thousands of elderly and disabled individuals from owing employment taxes for in-home care workers provided through State and local government programs. This legislation also improves IRS service and outreach to low-income taxpayers in several ways. First, it allows IRS employees to refer taxpayers requiring assistance with tax cases to qualified low-income taxpayer clinics. It also requires that the IRS notify taxpayers of their potential eligibility for the Earned Income Tax Credit, which has been the largest need-based, anti-poverty program in the United States, lifting millions of Americans out of poverty every single year. GAO estimates that in 2004, Americans failed to claim $8 billion in earned income tax credits, hundreds of millions of dollars in my home State of Ohio alone. These credits have the potential to help strengthen families and their financial security while also benefiting our communities at large by stimulating local economic development and job growth. And in order to ensure that eligible families can continue to take advantage of the earned income tax credit, this legislation authorizes an annual $10 million grant to Volunteer Income Tax Assistance, or VITA, programs. VITA provides free assistance to qualified low-income taxpayers, thanks to these grants as well as the assistance of dedicated volunteers across the country. The availability of these valuable services makes it unnecessary for working families to turn to high-cost tax preparers and unscrupulous organizations engaging in predatory practices like offering what is called ``Refund Anticipation Loans.'' The Taxpayer Assistance and Simplification Act also includes several provisions to strengthen privacy protections and government accountability. Importantly, it prohibits the IRS from providing individual taxpayer information to private entities employing predatory loan tactics. And it requires the IRS to notify taxpayers of suspected identity theft and fraud. It also takes the important step of repealing the authority of the IRS to contract with private debt collection agencies. Mr. Speaker, there is no duty more central to the functioning of the Federal Government than the collection of its revenue. But under the Bush Administration, this inherently governmental responsibility has been farmed out to private collectors who keep up to 25 percent of the tax revenues they collect. The program has caused confusion and aggravation for many taxpayers because these private debt collectors frequently demand sensitive personal information without revealing the nature of their phone calls, as was documented in a Ways and Means Committee hearing last year. In addition, the operations of private contractors are not held to the same standard of transparency as required of the Federal Government. There is the danger that sensitive personal information could be compromised through careless handling of these cases without accountability. The Taxpayer Advocate Service has reported over 1,500 complaints related to this program. And not only are there serious privacy and service issues, but the promised cost savings of the private debt collection program has simply not materialized. One needs to look no further than a headline on the front page of today's Washington Post that proclaims, ``Collectors Cost IRS More Than They Raise.'' Private debt collectors are also less efficient than the IRS. As the IRS Taxpayer Advocate Service points out, the Department of the Treasury estimates that private collection agencies collect $4 for every dollar it invests in tax collection efforts, but every dollar invested in IRS collections yields five times that amount. The downside of continuing to outsource the duties of the Internal Revenue Service clearly outweigh any benefits. It's just another disturbing example of a core governmental function being outsourced to private contractors with subpar results and a lack of transparency and accountability. It is a waste of taxpayer resources, and it is about time that we eliminated the IRS's authority to outsource this government responsibility. The Taxpayer Assistance and Simplification Act improves government accountability and makes the Tax Code simpler and fairer for all Americans. I urge my colleagues to support this rule and the underlying legislation.