Sec. 6304. Reform of rules related to qualified tax collection contracts
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Section 6306 is amended by redesignating subsections
(c)through
(f)as subsections
(d)through (g), respectively, and by inserting after subsection
(b)the following new subsection: Notwithstanding any other provision of law, the Secretary shall enter into one or more qualified tax collection contracts for the collection of all outstanding inactive tax receivables. For purposes of this section— The term inactive tax receivable means any tax receivable if— at any time after assessment, the Internal Revenue Service removes such receivable from the active inventory for lack of resources or inability to locate the taxpayer, more than 1/3 of the period of the applicable statute of limitation has lapsed and no employee of the Internal Revenue Service has been assigned such receivable for collection, or in the case of a receivable which has been assigned for collection, more than 365 days have passed without interaction with the taxpayer or a third party for purposes of furthering the collection of such receivable. The term tax receivable means any outstanding assessment which the Internal Revenue Service includes in potentially collectible inventory. . Section 6306, as amended by subsection (a), is amended by redesignating subsections
(d)through
(g)as subsections
(e)through (h), respectively, and by inserting after subsection
(c)the following new subsection: A tax receivable shall not be eligible for collection pursuant to a qualified tax collection contract if such receivable— is subject to a pending or active offer-in-compromise or installment agreement, is classified as an innocent spouse case, involves a taxpayer identified by the Secretary as being— deceased, under the age of 18, in a designated combat zone, or a victim of identity theft, is currently under examination, litigation, criminal investigation, or levy, or is currently subject to a proper exercise of a right of appeal under this title. . Section 6306, as amended by the preceding provisions of this section, is amended by redesignating subsection
(h)as subsection
(i)and by inserting after subsection
(g)the following new subsection: In contracting for the services of any person under this section, the Secretary shall give priority to private collection contractors and debt collection centers on the schedule required under section 3711(g) of title 31, United States Code, to the extent such private collection contractors and debt collection centers are appropriate to carry out the purposes of this section. . Section 6103(k) is amended by adding at the end the following new paragraph: Persons providing services pursuant to a qualified tax collection contract under section 6306 may, if speaking to a person who has identified himself or herself as having the name of the taxpayer to which a tax receivable (within the meaning of such section) relates, identify themselves as contractors of the Internal Revenue Service and disclose the business name of the contractor, and the nature, subject, and reason for the contact. Disclosures under this paragraph shall be made only in such situations and under such conditions as have been approved by the Secretary. . Section 6306, as amended by the preceding provisions of this section, is amended by redesignating subsection
(i)as subsection
(j)and by inserting after subsection
(h)the following new subsection: The Secretary may prescribe procedures under which a taxpayer determined to be affected by a federally declared disaster (as defined by section 165(i)(5)) may request— relief from immediate collection measures by contractors under this section, and a return of the inactive tax receivable to the Internal Revenue Service for collection. . Section 6306, as amended by the preceding provisions of this section, is amended by redesignating subsection
(j)as subsection
(k)and by inserting after subsection
(i)the following new subsection: Not later than 90 days after each fiscal year ending on September 30, the Secretary shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report with respect to qualified tax collection contracts under this section which shall include— annually (with respect to each such fiscal year beginning with the first such fiscal year ending after the date of the enactment of this subsection)— the total number and amount of tax receivables provided to each contractor for collection under this section, the total amounts collected (and amounts of installment agreements entered into under subsection (b)(1)(B)) with respect to each contractor and the collection costs incurred (directly and indirectly) by the Internal Revenue Service with respect to such amounts, the impact of such contracts on the total number and amount of unpaid assessments, and on the number and amount of assessments collected by Internal Revenue Service personnel after initial contact by a contractor, the amount of fees retained by the Secretary under subsection
(e)and a description of the use of such funds, and a disclosure safeguard report in a form similar to that required under section 6103(p)(5), and biannually (beginning with the second report submitted under this subsection)— an independent evaluation of contractor performance; and a measurement plan that includes a comparison of the best practices used by the private collectors to the collection techniques used by the Internal Revenue Service and mechanisms to identify and capture information on successful collection techniques used by the contractors that could be adopted by the Internal Revenue Service. . Section 881 of the American Jobs Creation Act of 2004 is amended by striking subsection (e). The amendments made by subsections
(a)and
(b)shall apply to tax receivables identified by the Secretary after the date of the enactment of this Act. The amendments made by subsection
(c)shall apply to contracts and agreements entered into after the date of the enactment of this Act. The amendments made by subsection
(d)shall apply to disclosures made after the date of the enactment of this Act. The amendments made by subsections
(e)and
(f)shall take effect on the date of the enactment of this Act.