Don't Mess With Taxes

47 percent of former private tax debt collection cases left untouched by IRS

When the IRS ended its controversial private tax debt collection program in 2009, Commissioner Douglas Shulman echoed the belief of consumer advocates and many members of Congress that such a job was more properly suited to federal employees, not hired hands.

"I believe this work is best done by IRS employees, and I believe we have strong support from the Administration and the Congress for increased IRS enforcement resources going forward," said Shulman back then.

Apparently the commish was misinformed.

A statistical sample of the previous private tax debt collection cases by the Treasury Inspector General for Tax Administration (TIGTA) found that almost half of the taxpayer accounts returned to the IRS by fired private collectors have not been followed up on by the feds.

And that sampling's finding of 47 percent of languishing past-due tax cases is this week's By the Numbers figure.

The cases formerly pursued by private tax collectors were not selected by the IRS for continued collection action due to collection policies and inventory assignment practices at the agency, according to the TIGTA report.

That decision, says TIGTA, led to an estimated $30.7 million in collections that would remain as outstanding.

In addition, TIGTA analysts found that the IRS might not collect an additional $103.2 million per year, or $516 million over the next five years, from similar cases in its inventory that would have been assigned to the private tax debt collection program if it had stayed in effect.

Dueling data: The IRS, not surprisingly, disagrees with the TIGTA findings about how it has absorbed the private tax debt collection cases.

In a letter that is included as an appendix to the report, Faris Fink, commissioner of the IRS Small Business/Self-Employed Division, said TIGTA's estimates of potential taxes that will go uncollected were inflated.

TIGTA's methodology "assumes future collection rates that are unsupported by actual results and excludes potential revenue actions that may result from the IRS working these accounts in the future," wrote Fink.

He also said it was misleading for TIGTA to characterize the returned private tax collection cases as not being worked by the IRS.

"Cases that remain unresolved are subject to refund offsets, systemic levy programs, and federal tax lien filing, and will receive written correspondence from the IRS on a regular basis," Fink wrote.

As for TIGTA suggestions on how the IRS can better review tax case assignment practices, Fink said that the agency "continually reviews and updates its collection practices and operations, including inventory selection."

On Capitol Hill, an ardent advocate for the private tax debt collection program had harsh words for the IRS in the wake of the TIGTA report.

"The IRS assured us all that the agency could do a better job with these tax cases than outside firms and didn't need any help," said Senator Charles Grassley (R-Iowa) in a statement. "It turns out that the IRS isn't doing a better job and in many cases, isn't doing the job at all. The IRS and Treasury Department went out of their way to stop a means of collecting tax debt that the IRS otherwise will never collect. They bowed to union pressure and terminated an alternative collection program before it had a chance to reach its full potential."

IRS workers chime in: Treasury employees disagreed with the TIGTA numbers, but also remained committed to the end of the program that federal workers said eliminated their jobs.

National Treasury Employees Union President Colleen Kelley said in a statement to Tax Analysts that the sampling used by TIGTA was "far too small" to be representative.

Still, said the union leader, the IRS use of private debt collectors "was a financial failure by any measure." And despite the TIGTA findings, Kelly said the IRS is best positioned to assist taxpayers in meeting their tax obligations.

On that the Treasury workers and TIGTA agree.

"The IRS must do its best to work these cases, since taxpayers who do not timely pay all their taxes create an unfair burden on taxpayers who do," said J. Russell George, Treasury Inspector General for Tax Administration. "This sense of unfairness can erode the public's respect for the tax system."

You also might find these items of interest:

• House to IRS: Do your job!
• Ready, set, collect
• Private property tax collector troubles

Private property tax collector troubles

Private tax debt collectors are back in the news. But this time it's because of local government, not IRS, involvement.

"Homeowners on Shaky Footing Could Lose it All Over Taxes," announces the New York Times today on the front page of its national edition.

Cash-strapped counties and cities, reports the Times, are selling delinquent tax bills to private firms. It sounds like a good deal.

The local governments get a quick infusion of cash and don't have to be bothered with (or paying for) collection efforts.

Investors in the tax collection efforts get a risky, but potentially high return, way to earn money. "It beats the heck out of any certificate of deposit," Howard Liggett, executive director the National Tax Lien Association told the Times.

Of course, the delinquent property owners are the big losers. Everyone agrees that they should pay their tax bills. But in this economy, that obligation often is pushed to the bottom of the list, behind making the actual mortgage payment and covering other living expenses.

A local tax collector who knows what you're going through might be more inclined to help you work out a payment plan.

Private debt collectors, however, generally don't care about why a person can't pay a bill. They just want the money or the property.

Plus, the private firms tend to charge higher interest rates and fees on late accounts than do governments.

And one county official told the New York Times that in the long term, the private collection efforts could be bad for localities:

"In the beginning, you're getting this immediate windfall of cash," said Anita Lopez, the auditor of Lucas County, Ohio, which sold off more than 3,000 tax liens for $14.7 million. The county includes Toledo. "But when you think about abandoned properties, foreclosed properties — the cost to the community is far more expensive than the short-term benefits."

How does your city, county or school district deal with delinquent property taxes? Is it handled all in-house? Here in the Austin area, private debt collectors (including one that the IRS decided not to work with even before it completely pulled the plug on the federal program) have been used.

I know things are tough for local governments, but it sure seems like we're in a bizarro tax world when it's the IRS that has decided to take economic considerations into account in dealing with overdue taxes and our local tax collectors are playing no-excuses, no-explanation hard ball.

Related posts:

• Economy prompts change in IRS attitude
  
• Home tax liens get special attention
• Private tax collection ends today
• House to IRS: Do your job!
• Grassley gung-ho on private tax debt collectors
• Ready, set, collect

Private tax collection ends today

The controversial private tax debt collection program ends today.

But its demise didn't come from Capitol Hill lawmakers, many of whom have, since the program's inception, opposed the outsourcing of some unpaid tax bills to private debt collection agencies. Not that they weren't still trying. The most recent effort was via the comprehensive federal funding bill now awaiting approval and which includes a provision to end the program.

Rather the decision came from the IRS.

IRS Commissioner Doug Shulman announced yesterday afternoon that he would not renew collection agency contracts.

The collection work had been conducted by CBE Group Inc. of Waterloo, Iowa, and Pioneer Credit Recovery, Inc. of Arcade, N.Y. Their contracts expire today. A third collection company from Austin originally was part of the program, but its contract was dropped a year ago.

In-house more effective:  "I believe this work is best done by IRS employees, and I believe we have strong support from the Administration and the Congress for increased IRS enforcement resources going forward," said Shulman.

One of the key factors in the decision to return all collection actions to IRS employees is the recent move by the agency to give its staff more flexibility in handling cases, especially those that are in part cased by the current economic downturn.

This is the latest effort by the IRS to accommodate financially struggling taxpayers. First it announced expedited release of cleared tax liens. A few weeks later, the Commissioner detailed ways IRS personnel would work with folks who, because of financial difficulties, are having a hard time paying their tax bills.

In conjunction with the end of the private collection contracts, Shulman noted that the IRS anticipates hiring over 1,000 new collection personnel in fiscal year  2009. The Commissioner said these new employees would give the IRS the flexibility to make assignments based on the areas of greatest need rather than filtering which cases can be worked using contractor resources.

Shulman also cited the results of a cost-effectiveness study of the private debt collection program. The study, supported by an independent review, showed that it is reasonable to conclude that when working similar inventory, IRS collection is more cost effective than the contractors.

One unhappy Senator: One lawmaker who is not pleased (despite that official portrait below) with Shulman's decision is Senate Finance Committee ranking minority member Charles Grassley (R-Iowa).

Grassley has been been a big supporter of the the private collection of tax debt, part of which is contracted to a company based in his state. The IRS Oversight Board also had weighed in on the benefits of the private collections.

Grassley continued his effort this week as the Senate took up the omnibus spending bill that contained a provision to end the outsourced collections. He wrote to Treasury Secretary Timothy Geithner and Shulman seeking more information on the program.

He didn't get the response that he wanted.

Grassley blamed the demise of the collection program largely on efforts by the National Treasury Employees Union, which has been a vocal opponent of the program.

However, the union was not alone in calling for the end of the contract collections. In addition to many (and mostly Democratic) Representatives and Senators and consumer groups, the National Taxpayer Advocate also had called for an end to the program, saying it was an inefficient attempt to privatize the IRS responsibility to collect taxes.

Speaking of funding ...: The Omnibus Appropriations Act needed to keep the government running beyond today is having trouble clearing the Senate.

Those lawmakers have postponed consideration of the massive bill until next week. 

Stopgap funding that will keep government offices operational through Tuesday, March 10, is expected to be passed today.

Related posts:

• Another effort to ax private tax collectors
• Private tax collection party is over ... maybe
• Taxpayer bill of rights approved ... again
• House to IRS: Do your job!.
• Grassley gung-ho on private tax debt collectors

Another effort to ax private tax collectors

Everybody's got their noses deep in Obama's first budget proposal, which I previewed yesterday, and I plan to look at the specifics released today, too. First though, I have to clear some stuff off my never-ending Do Now list.

One of the things on that list is a reminder to examine current Congressional funding measures. Yeah, I know, you wish you lived my exciting life.

But, hey, money makes the world, including all our federal agencies and programs, go round.

And included in the Omnibus Appropriations Act of 2009 (H.R. 1105) that was passed yesterday by the House is a provision to end IRS use of private debt collectors.

Don't get you hopes up just yet, debt collector opponents. This has happened before in past appropriation processes. The House said no, the Senate said yes and in the end, the collectors continued their IRS contracting jobs.

Other outsourcing axed, too: Private tax debt collectors weren't the only personnel issue in the funding bill. The appropriations act also calls for a one-year government-wide ban on new public-private job competitions for federal work under Office of Management and Budget contracting rules.

Both efforts to keep government jobs in-house were welcomed by the National Treasury Employees Union, which has been a vocal opponent of the private tax collection effort.

"These provisions are the clearest sign yet that Congress recognizes the previous administration's competitive sourcing initiative has been a disaster," NTEU President Colleen M. Kelley said in a statement issued after the House vote.

More money for service and exams: In addition to the worker rules, the appropriations bill would increase the IRS budget significantly over the last fiscal year's levels, including $2.3 billion slated for taxpayer service.

Part of that allocation ($193 million) would go to the Taxpayer Advocate Service, which helps taxpayers when they can't get their problems resolved through regular IRS channels.

The main job of the IRS, however, wasn't forgotten. The bill would provide $5.1 billion for tax enforcement.

Next step: The funding measure, passed by a 245-to-178 vote, allocates money for the rest of the 2009 fiscal year for all those areas that were left hanging in the last Congress. In addition to funds for the Treasury Department, the rest of the money OK'ed by the House would go to:

• $151.8 billion for labor, health and education
• $20.5 billion for agriculture, rural development and the Food and Drug Administration
• $57.7 billion for commerce, justice and science
• $33.3 billion for energy and water
• $22.7 billion for financial services and general government
• $27.6 billion for interior and the environment
• $4.40 billion for the legislative branch
• $36.6 billion for state and foreign relations
• $55 billion for transportation and housing and urban development.

These departments had been operating under what's known as a continuing resolution that expires next week, March 6 to be precise. Now the Senate has to sign off on the measure.

You can read the actual bill, but be warned: it's 1,123 PDF pages. The House Appropriations Committee has broken it down into more digestible portions.

Related posts:

• Private tax collection party is over ... maybe
• Taxpayer bill of rights approved ... again
• House to IRS: Do your job!.
• Grassley gung-ho on private tax debt collectors
  

The 'softer' side of IRS collections

Remember the kinder, gentler IRS? That tax collector persona appeared following the agency's 1998 reorganization that was mandated by Congress following public outrage over collection tactics.

As the deficit has grown, and Congress can seem to make itself pay for projects, the IRS has been given more leeway to get tough again. Capitol Hill  has instructed the agency to find ways to close the tax gap, the billions of dollars the IRS says it is owed but that hasn't been paid.

To this end, private debt collectors have been hired. The IRS also has ramped up audits.

But it looks like the agency thinks there's still a place for less aggressive ways to get money it is owed.

"Soft notice" pilot program: This month, the IRS is testing a pilot program that will alert taxpayers that they may be underreporting income on their returns and give them a chance to make good on the owed tax by filing amended 1040s. The IRS believes there are around 15 million cases of underreported income each year.

The so-called "soft notice," officially known as CP 2057, will start going out mid-October to about 31,000 taxpayers.

This notice doesn't propose changes to taxpayer returns. It will simply "encourage" notice recipients to "double check" the tax filing information in question and, if they find errors, "self-correct" by filing Form 1040X.

"We believe this approach will allow taxpayers to correct underreporting issues without having to extensively correspond with the IRS, thus benefiting both taxpayer and the Service," according to IRS spokesman Bruce Friedland in a statement about the program.

Computer checking: The CP 2057 notices are automatically generated by the IRS' computerized document matching system. The technology compares information on a taxpayer's tax return with third-party tax documents, such W-2s and investment statements.

If you get a CP 2057, you don't have to respond to the agency. Rather, the notice instructs you to contact the third party who issued the tax data in question if you believe there's been a reporting mistake.

If, however, you realize you did indeed forget to include that part-time job's income or the interest from that savings account, you'll need to file an amended return to straighten out your tax liability.

You always can ignore the notice. The IRS says it won't take any action. I'm not sure I believe this.

But if reporting discrepancies are found on your next tax return, you can be sure that the subsequent questionable return will be bumped to the top of the tougher CP 2000 notice list.

CP 2000's tougher line: With the CP 2000, the IRS actually proposes changes to your return based on the third-party data. This includes the amount of unpaid tax calculated by the IRS, along with penalty and interest charges.

With a CP 2000, the agency assumes that its changes to your Form 1040 entries are correct. You do, however, have 30 days from receipt of the proposed changes to tell the IRS why your original numbers were correct.

Low-hanging tax fruit: The IRS says the new CP 2057 notice was developed to deal with at least some of the more than 10 million cases each year that the agency doesn't follow up on because the amount due might not be worth the cost to pursue under the current notice and collection process.

These returns are part of what the IRS has referred to as "low-hanging" fruit that it handed off to private debt collectors. However, since that program seems in jeopardy because of continued Congressional opposition, the CP 2057 could help bring in that missing tax money.

The IRS says the CP 2057 pilot program will require only "a very small portion" of staff to administer. But if these CP 2057 mailings prove successful in bringing the U.S. Treasury some extra cash, expect the IRS to expand the notice's use.

The IRS informed tax preparers about the CP 2057 via this presentation delivered at the agency's Nationwide Tax Forums this summer. The acronym "AUR" in the slide show stands for automated underreporting."

Avoiding IRS attention: The IRS also gives good advice in that presentation's last slide that should be followed every filing season:

• Keep good records of all your income.
• Report all your income and pay attention to your tax form as to exactly where to list it.
• Review your return before filing it to make sure it includes all your income.
• Make sure that payers (employers, investment companies, etc.) have your most current address so you get the same statements that are sent to the IRS.

You also might want to check out the "Living too large alerts the auditor" section of this post for tips on dealing with an audit.

Other ways to keep you from becoming an audit target can be found at:

• Tempting the tax auditor, an article I wrote for Bankrate.com,
• The Entrepreneur's Guide to Avoiding a Tax Audit, a blog entry from The Digerati Life, and
• Audit Avoidance 101, tips courtesy AccountingWeb.com.

And here's hoping you never meet an auditor and never get a CP 2057 or CP 2000 notice!

Taxpayer Bill of Rights approved ... again

Congress' annual political show of support for taxpayers continued yesterday.

Every April 15, lawmakers look to highlight the concerns of John and Jane Public. It's not that I necessarily doubt their sincerity; I'm sure that some in Washington really do want to improve the system and process for us all when it comes to paying for our government's operations.

But I just wish rather than using the tax-filing deadline as a publicity tool, legislators would work on tax issues year round and come up with some changes that actually get implemented.

Take yesterday's latest version of a taxpayer bill of rights. By a vote of 238 to 179, the House approved the Taxpayer Assistance and Simplification Bill of 2008 (HR 5719).

Good job, guys. Now we just have to wait for the Senate to follow suit so the bill can go to the White House for the promised veto.

Despite the doomed prospects, Representatives put on a good front, as well as tried to score some political points in this election year. House Majority Leader Steny Hoyer (D-Md.), pointing to a tax code that has grown by more than 10,000 pages between 2001 to 2006, said the bill is needed to undo tax code complexity created by the Republican-controlled Congress and the Bush administration.

Against private debt collectors: A key part of the bill, which was introduced by House Ways and Means Oversight Subcommittee Chairman John Lewis (D-Ga.), would prohibit IRS use of third-party debt collectors to bring in unpaid taxes.

Opponents of the debt collectors (notably Lewis, as blogged about here) argue that the private agents are not as efficient as IRS employees and actually cost more money than they collect. They point to a Government Accountability Office study that found some debt collectors made unnecessary calls to taxpayers just to meet call volume goals.

Dubya et al, however, still support the private collection agents, part of the Administration's larger goal of privatizing as many government tasks as they can.

So the debt collector provision alone would prompt the prez to pull out his veto pen.

HSA language problematic, too: However, the White House also opposes a provision in the bill that would require that Health Savings Account (HSA) distributions be verified as used for medical expenses.

Opponents say such reporting requirements for HSA trustees is "unnecessary for efficient tax administration, inconsistent with the flexibility purposely afforded HSAs at their inception and could undermine efforts by employers, individuals and insurers to reduce health care costs and improve health outcomes by empowering consumers to take greater control of health care decision-making."

More on these and other provisions in the latest Taxpayer Assistance and Simplification Bill can be found in this report from WTOP radio and this CNNMoney story.

As for the prospects of legislation to make our taxpaying lives easier, expect lots more posturing leading up to November, but little real action from either side.

Private tax debt collection axed by House

Unfortunately for opponents of outsourced tax collection, the House action isn't a fatal blow.

In fact, the passage yesterday of H.R. 3056, the Tax Collection Responsibility Bill of 2007, serves only as an annoyance, not a serious threat, to the efforts of private bill collectors hired by the IRS.

"No" to private collectors: Supporters of the bill, mostly Democrats, say that private collection agencies (PCAs) are not nearly as efficient as IRS employees. House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., said data shows IRS employees collect unpaid taxes at a much faster pace than PCAs, whom he likened to "bounty hunters" because of the commissions they earn.

"No one ever likes the tax collector but you do feel a little more secure when you know a public servant is doing his or her job and not some fly-by-night company whose profits are based on how much they collect in taxes," Rangel said in a release applauding the House vote. "Today we are improving government accountability and protecting the privacy of taxpayers by stopping the outsourcing of a core government function."

"Yes" to private collectors: Opponents of H.R. 3056, mostly Republicans, disagree with Rangel's assessment and dispute his dollar figures. They say PCAs have been fiscally successful without violating federal consumer protections. (That last part is debatable; see this earlier blog item on the topic.)

Plus, say PCA-supporters, the IRS doesn't have enough personnel to collect money from the hard-to-reach taxpayers that PCAs track down.

When the debate finally wrapped up and the votes were tallied, opponents of private tax debt collectors won. This day, at least. In the House of Representatives. For all the good that does.

When the legislative process runs its full course, PCAs are likely to still be on the job.

Senate support: Senate Finance Committee ranking member Charles E. Grassley, R-Iowa, said the House bill was "dead on arrival in the Senate." Grassley has been a avid supporter of the private tax collection plan, as noted in this blog entry, and he plans to keep up the fight for PCAs.

"Opponents raise the fear of rogue private operators treading all over taxpayers' rights," said Grassley in a prepared statement issued after the House vote. "But the program has multiple layers of scrutiny to make sure taxpayers' rights are fully protected."

As expected, the While House agrees with Grassley (or vice versa), and if a bill to eliminate the private collection program does somehow make it to Dubya's desk, it will be vetoed. The statement making the Administration's PCA point can be found here.

House to IRS: Do your job!

The House Ways and Means Committee has thrown the latest punch in the continuing battle over IRS use of private tax debt collectors. It's a solid hit, but far from a knock-out blow.

Ways and Means, the Congressional panel responsible for originating federal tax legislation, has approved HR. 3056, The Tax Collection Responsibility Act of 2007. In keeping with its name, Representatives, at least a majority on the tax-writing panel, are demanding that the IRS resume full responsibility for bringing in federal tax money.

The bill cuts right to the chase. From the Committee's description of the measure: "The proposal repeals the authority for the IRS to enter into private debt collection contracts."

Following the 23-to-18 approval of H.R. 3056, which members also are referring to as the "Good Government Tax Bill" (let's not get carried away, fellas), Representatives who have been fighting to end the program were ecstatic.

"The private debt collection program is an insult to the American taxpayer and our Federal tax system," said Oversight Subcommittee Chairman John Lewis. "The collection of taxes is a core government function. It is the Internal Revenue Service’s (IRS) mission.

"We found that, in addition to taxpayer harassment, this program wastes tax dollars by paying a bounty up to 24 percent to the debt collectors. We were told by the IRS Commissioner that IRS employees could do the job more efficiently for less money. Enough is enough, we must stand up for taxpayers and we must stand up for IRS employees by ending this program."

The tale of the tape: The findings Lewis refers to were from a May 23 hearing, at which the Georgia Democrat lit into the president of the CBE Group, one of the IRS-hired collection agencies.

In connection with questions about whether such private bill collectors diligently follow federal law that prohibits harassment of owing individuals, Lewis played a tape recording (you can read the transcript) of a CBE agent giving a taxpayer a hard time.

According to the material presented at that hearing, the collection company employee refused to fully identify herself but nonetheless continued to demand that the taxpayer provide a Social Security number and mailing address.

When the taxpayer finally asked for the calls to stop, the collection agency representative replied, "I'm not sure what we can necessarily do to stop that."

The call ended in a standoff. The taxpayer said he would not provide any personal information until he knew exactly who he was talking to and why she wanted the data. The bill collector said she couldn't tell the taxpayer anything more until the taxpayer verified his identity.

Nice. A perfect debt collection Catch-22, not to mention apparent violations of several provisions of the Fair Debt Collections Practices Act. You can read more on the FDCPA and ways to protect yourself against abusive bill collectors is contained in this previous blog entry.

Even CBE Group president and CEO Thomas R. Penaluna, who testified at the hearing and listened to the recording there, thought his employee went a bit overboard. Penaluna admitted that if he had been called by this particular employee, he would have acted exactly as the taxpayer did and would not have given out personal data over the phone to a stranger.

Collection cut-off: The IRS' authority to hire private collection agents would be repealed as soon as H.R. 3056 is signed into law.

OK. So that enactment factor is one little buzz kill in the overall celebration by opponents of private tax bill collectors. As noted earlier, another group of Representatives, those holding the IRS purse strings, have a totally different opinion on private collection agents.

And while Senators overseeing budget issues tend to agree with Ways and Means members on this matter, not so an influential member of the House panel's counterpart on the other side of Capitol Hill. Charles Grassley of Iowa, the leading Republican on the Senate Finance Committee, has already initiated his own personal effort to save the program.

So get ready for at least a few more bruising rounds in this legislative battle before the private tax debt collection issue is resolved, one way or the other.

The private tax collection party is over ... maybe

Private debt collectors who, since last September have been bringing in delinquent taxes under IRS contract, were celebrating a couple of weeks ago.

The party hats were donned and high fives struck after the House approved -- well, technically, it didn't disapprove -- funds for the continued hiring of private collection agents, known as PCAs in IRS parlance.

But over on the Senate side of Capitol Hill, the PCA roller coaster is definitely heading down.

Yesterday, the Financial Services and General Government Subcommittee of the Senate Appropriations Committee signed off on an $11.1 billion fiscal 2008 IRS budget. However, that measure also limits future funding for PCAs, effectively terminating the controversial initiative.

Of course, this is Congress we're talking about, the ultimate American amusement park, so the legislative thrill rides are far from over.

The Senate Appropriations Committee is scheduled to consider the IRS budget bill later this week. Then it will go to the full Senate for consideration.

If the Senate version makes it through with the PCA restrictions, it will have to be reconciled with the more pro-PCA House budget bill. And it's always such fun to watch Representatives and Senators try to come to some sort of compromise.

Ultimately, any measure will need Dubya's imprimatur to make it into law. And there's no guarantee that will happen, with or without money for the PCA program, if the budget busts the amount the Administration proposed earlier this year.

So maybe the debt collectors should just freeze the cake until the lawmakers and lobbyists are finished.

Private tax collectors 1, taxpayers 0

Before Capitol Hill cleared out for the July 4th holiday, the House approved an $11 billion IRS budget.

That's a 4.7 percent increase over last fiscal year's IRS budget. The money for FY 2008, which begins Oct. 1, includes $3.6 billion for taxpayer service; $7.2 billion for enforcement efforts; $282 million for business systems modernization; and $116 million for tax compliance research.

But the bill is noteworthy for what isn't in it.

The House removed a provision that would have eliminated funding for the private collection of tax debts.

The outsourcing of tax collection has been a contentious issue for the last several years. Even before the current program began last fall, some lawmakers began working to kill it. The House did in fact approve outright repeal of the program last year, but since the Senate failed to act, the program continued. (You can read the pro-con saga in this collection of blog postings.)

This year, opponents took another approach. They inserted language in the 2008 budget limiting the IRS to no more than $1 million to "renew, extend, administer, implement, enforce, provide oversight of" private tax-debt collection. That would have effectively killed the program.

But when it came to a vote on June 28, defenders of the debt collection program used a procedural move to strip the funding limitation from the bill. Dismantling the collection effort now, they argued, could cost the IRS $69 million in 2008.

Privately raking in the tax dough: Enough Representatives also were apparently swayed by the dollars that the IRS says the program will bring in -- an estimated $22 million in 2007 and $63 million in 2008. So far, according to the IRS, private collectors have recovered almost $20 million, and the agency's goal over the next 10 years is more than $2 billion.

Opponents of private tax collection vowed to keep fighting. "There is clearly a consensus in the Congress to end the ongoing abuses in the IRS' private tax collection program, and that consensus won't be thwarted by procedural gimmicks," said Rep. Chris Van Hollen, D-Md. "We are determined to end this kind of bounty-hunting activity once for all."

The appropriations measure also must clear the Senate, which has a private tax-debt collection ally in Senate Finance Committee ranking member Charles Grassley, R-Iowa, who earlier this year wrote his colleagues urging their support of the program.

Ultimately, any funding measure must go to the president for signature. And while the White House supports private tax collection, a spokesman for the president said Dubya might veto the entire bill if it exceeded his recommended budget amounts, which the House bill does by $52 million.