March 06,2009

Grassley calls on IRS to explain its use of flawed study, give honest taxpayers confidence that it’s collecting from others after program termination

WASHINGTON -- Senator Chuck Grassley said that the facts used by the Treasury Department and the Internal Revenue Service to cancel a private debt collection plan this week don't add up and called on the IRS Commissioner to account for the flawed study created inside the agency to destroy the program. The senator said the agency must now establish how it will work to collect certain delinquent taxes as a matter of fairness to honest taxpayers.

"It seems the IRS and Treasury Department went out of their way to knock out an emerging, effective and even-handed way to collect tax debt that the IRS will otherwise never collect. They've sanctioned small-scale tax cheating because agency employee unions didn't want it revealed that someone else might be able to collect debt in a way that generates fewer complaints from taxpayers. The action is a set-back to attempts by the IRS to modernize, save money and deal with taxpayers in a more professional way," said Grassley.

Grassley has been fighting similarly motivated legislation to end the program as part of the pending omnibus spending bill, alongside the IRS deciding whether to renew contracts. He said the false pretenses employed to destroy the private debt collection program makes it necessary to document the facts for future tax policy and tax administration determinations.

"It's also important for all the honest taxpayers who are doing everything it takes right now to file accurately on April 15, have assurances that the IRS hasn't decided to turn a blind eye to tax evasion by others," Grassley said. The private debt collection program that has been terminated collected tax debt that the IRS had otherwise determined wasn't cost-effective to try to collect, and the private program was proving that it could do so in a self-funding way.

Grassley is Ranking Member of the Senate Committee on Finance. He's a longtime advocate for taxpayer rights, having sponsored several taxpayer bills of rights and comprehensive IRS restructuring legislation enacted ten years ago.

"It's discouraging when common-sense efforts to make things fair for honest taxpayers in a way that's decent and logical all around get beat down by vested, powerful interests in Washington," Grassley said.

The text of the letter Grassley sent today can be found in the printer-friendly version of this  release, along with the statement he made about the program's termination on Thursday night and other news releases documenting Grassley's arguments in the recent debate. A copy of the IRS study in question and an IRS response to a Grassley letter sent last week are attached to this release as "related files."