26 U.S.C. § 6306

Current through P.L. 118-106 (published on www.congress.gov on 10/04/2024)

Section 6306 - Qualified tax collection contracts

(a) In general

Nothing in any provision of law shall be construed to prevent the Secretary from entering into a qualified tax collection contract.

(b) Qualified tax collection contract

For purposes of this section, the term "qualified tax collection contract" means any contract which-

(1) is for the services of any person (other than an officer or employee of the Treasury Department)-

(A) to locate and contact any taxpayer specified by the Secretary,

(B) to request full payment from such taxpayer of an amount of Federal tax specified by the Secretary and, if such request cannot be met by the taxpayer, to offer the taxpayer an installment agreement providing for full payment of such amount during a period not to exceed 7 years, and

(C) to obtain financial information specified by the Secretary with respect to such taxpayer,

(2) prohibits each person providing such services under such contract from committing any act or omission which employees of the Internal Revenue Service are prohibited from committing in the performance of similar services,

(3) prohibits subcontractors from-

(A) having contacts with taxpayers,

(B) providing quality assurance services, and

(C) composing debt collection notices, and

(4) permits subcontractors to perform other services only with the approval of the Secretary.

(c) Collection of inactive tax receivables

(1) In general

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.

(2) Inactive tax receivables

For purposes of this section-

(A) In general

The term "inactive tax receivable" means any tax receivable if-

(i) 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,

(ii) more than 2 years has passed since assessment and such receivable has not been assigned for collection to any employee of the Internal Revenue Service, or

(iii) 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.

(B) Tax receivable

The term "tax receivable" means any outstanding assessment which the Internal Revenue Service includes in potentially collectible inventory.

(d) Certain tax receivables not eligible for collection under qualified tax collections contracts

A tax receivable shall not be eligible for collection pursuant to a qualified tax collection contract if such receivable-

(1) is subject to a pending or active offer-in-compromise or installment agreement,

(2) is classified as an innocent spouse case,

(3) involves a taxpayer identified by the Secretary as being-

(A) deceased,

(B) under the age of 18,

(C) in a designated combat zone,

(D) a victim of tax-related identity theft,

(E) a taxpayer substantially all of whose income consists of disability insurance benefits under section 223 of the Social Security Act or supplemental security income benefits under title XVI of the Social Security Act (including supplemental security income benefits of the type described in section 1616 of such Act or section 212 of Public Law 93-66), or

(F) a taxpayer who is an individual with adjusted gross income, as determined for the most recent taxable year for which such information is available, which does not exceed 200 percent of the applicable poverty level (as determined by the Secretary),

(4) is currently under examination, litigation, criminal investigation, or levy, or

(5) is currently subject to a proper exercise of a right of appeal under this title.

(e) Fees

The Secretary may retain and use-

(1) an amount not in excess of 25 percent of the amount collected under any qualified tax collection contract for the costs of services performed under such contract, and

(2) an amount not in excess of 25 percent of such amount collected to fund the special compliance personnel program account under section 6307.

The Secretary shall keep adequate records regarding amounts so retained and used. The amount credited as paid by any taxpayer shall be determined without regard to this subsection.

(f) No Federal liability

The United States shall not be liable for any act or omission of any person performing services under a qualified tax collection contract.

(g) Application of Fair Debt Collection Practices Act

The provisions of the Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.) shall apply to any qualified tax collection contract, except to the extent superseded by section 6304, section 7602(c), or by any other provision of this title.

(h) Contracting priority

In contracting for the services of any person under this section, the Secretary shall utilize private collection contractors and debt collection centers on the schedule required under section 3711(g) of title 31, United States Code, including the technology and communications infrastructure established therein, to the extent such private collection contractors and debt collection centers are appropriate to carry out the purposes of this section.

(i) Taxpayers in presidentially declared disaster areas

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-

(1) relief from immediate collection measures by contractors under this section, and

(2) a return of the inactive tax receivable to the inventory of the Internal Revenue Service to be collected by an employee thereof.

(j) Report to Congress

Not later than 90 days after the last day of each fiscal year (beginning with the first such fiscal year ending after the date of the enactment of this subsection), 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-

(1) annually, with respect to such fiscal year-

(A) the total number and amount of tax receivables provided to each contractor for collection under this section,

(B) 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,

(C) 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,

(D) the amount of fees retained by the Secretary under subsection (e) and a description of the use of such funds, and

(E) a disclosure safeguard report in a form similar to that required under section 6103(p)(5), and

(2) biannually (beginning with the second report submitted under this subsection)-

(A) an independent evaluation of contractor performance, and

(B) 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.

(k) Cross references

(1) For damages for certain unauthorized collection actions by persons performing services under a qualified tax collection contract, see section 7433A.

(2) For application of Taxpayer Assistance Orders to persons performing services under a qualified tax collection contract, see section 7811(g).

26 U.S.C. § 6306

Added Pub. L. 108-357, title VIII, §881(a)(1), Oct. 22, 2004, 118 Stat. 1625; amended Pub. L. 114-94, div. C, title XXXII, §§32102(a)-(c), (e), (f)(1), 32103(a), Dec. 4, 2015, 129 Stat. 1733-1736; Pub. L. 115-141, div. U, title IV, §401(a)(351), Mar. 23, 2018, 132 Stat. 1201; Pub. L. 116-25, title I, §1205(a)-(c), July 1, 2019, 133 Stat. 989.

EDITORIAL NOTES

REFERENCES IN TEXTThe Social Security Act, referred to in subsec. (d)(3)(E), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Title XVI of the Act is classified generally to subchapter XVI (§1381 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. Sections 223 and 1616 of the Act are classified to sections 423 and 1382e, respectively, of Title 42. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables.Section 212 of Public Law 93-66, referred to in subsec. (d)(3)(E), is set out as a note under section 1382 of Title 42, The Public Health and Welfare.The Fair Debt Collection Practices Act, referred to in subsec. (e), is title VIII of Pub. L. 90-321, as added by Pub. L. 95-109, Sept. 20, 1977, 91 Stat. 874, which is classified generally to subchapter V (§1692 et seq.) of chapter 41 of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title note set out under section 1601 of Title 15 and Tables.

AMENDMENTS2019-Subsec. (b)(1)(B). Pub. L. 116-25, §1205(c), substituted "7 years" for "5 years".Subsec. (c)(2)(A)(ii). Pub. L. 116-25, §1205(b), substituted "more than 2 years has passed since assessment" for "more than 1/3 of the period of the applicable statute of limitation has lapsed". Subsec. (d)(3)(E), (F). Pub. L. 116-25, §1205(a), added subpars. (E) and (F).2018-Subsec. (e)(2). Pub. L. 115-141, §401(a) (351), made technical amendment to directory language of Pub. L. 114-94, §32103(a) . See 2015 Amendment note below. 2015-Subsec. (c). Pub. L. 114-94, §32102(a), added subsec. (c). Former subsec. (c) redesignated (e).Subsec. (d). Pub. L. 114-94, §32102(b), added subsec. (d). Former subsec. (d) redesignated (f).Subsec. (e). Pub. L. 114-94, §32102(a), (b), successively redesignated subsec. (c) as (d) and then as (e). Former subsec. (e) redesignated (g).Subsec. (e)(2). Pub. L. 114-94, §32103(a), as amended by Pub. L. 115-141, §401(a) (351), substituted "to fund the special compliance personnel program account under section 6307" for "for collection enforcement activities of the Internal Revenue Service".Subsec. (f). Pub. L. 114-94, §32102(a), (b), successively redesignated subsec. (d) as (e) and then as (f). Former subsec. (f) redesignated (k).Subsec. (g). Pub. L. 114-94, §32102(a), (b), successively redesignated subsec. (e) as (f) and then as (g).Subsec. (h). Pub. L. 114-94, §32102(c), added subsec. (h).Subsec. (i). Pub. L. 114-94, §32102(e), added subsec. (i).Subsec. (j). Pub. L. 114-94, §32102(f)(1), added subsec. (j).Subsec. (k). Pub. L. 114-94, §32102(a), (b), (c), (e), (f)(1), successively redesignated subsec. (f) as (g), (h), (i), (j), and then (k).

STATUTORY NOTES AND RELATED SUBSIDIARIES

EFFECTIVE DATE OF 2019 AMENDMENT Pub. L. 116-25, title I, §1205(e), July 1, 2019, 133 Stat. 989, provided that:"(1) IN GENERAL.-Except as otherwise provided in this subsection, the amendments made by this section [amending this section and section 6307 of this title] shall apply to tax receivables identified by the Secretary (or the Secretary's delegate) after December 31, 2020. "(2) MAXIMUM LENGTH OF INSTALLMENT AGREEMENTS.-The amendment made by subsection (c) [amending this section] shall apply to contracts entered into after the date of the enactment of this Act [July 1, 2019]. "(3) USE OF SPECIAL COMPLIANCE PERSONNEL PROGRAM ACCOUNT.-The amendment made by subsection (d) [amending section 6307 of this title] shall apply to amounts expended from the special compliance personnel program account after the date of the enactment of this Act."

EFFECTIVE DATE OF 2015 AMENDMENT Pub. L. 114-94, div. C, title XXXII, §32102(g)(1), (2), Dec. 4, 2015, 129 Stat. 1736, provided that:"(1) IN GENERAL.-The amendments made by subsections (a) and (b) [amending this section] shall apply to tax receivables identified by the Secretary [probably means Secretary of the Treasury] after the date of the enactment of this Act [Dec. 4, 2015]. "(2) CONTRACTING PRIORITY.-The Secretary shall begin entering into contracts and agreements as described in the amendment made by subsection (c) [amending this section] within 3 months after the date of the enactment of this Act."Pub. L. 114-94, div. C, title XXXII, §32102(g)(4), Dec. 4, 2015, 129 Stat. 1736, provided that: "The amendments made by subsections (e) and (f) [amending this section and repealing provisions formerly set out as a note under this section] shall take effect on the date of the enactment of this Act [Dec. 4, 2015]."Pub. L. 114-94, div. C, title XXXII, §32103(d), Dec. 4, 2015, 129 Stat. 1738, provided that: "The amendment made by subsection (a) [amending this section] shall apply to amounts collected and retained by the Secretary [probably means Secretary of the Treasury] after the date of the enactment of this Act [Dec. 4, 2015]."

EFFECTIVE DATE Pub. L. 108-357, §881(f), Oct. 22, 2004, 118 Stat. 1627, provided that: "The amendments made to [by] this section [enacting this section and section 7433A of this title, amending sections 7809 and 7811 of this title, and amending provisions set out as a note under section 7804 of this title] shall take effect on the date of the enactment of this Act [Oct. 22, 2004]."

BIENNIAL REPORT Pub. L. 108-357, §881(e), Oct. 22, 2004, 118 Stat. 1627, directed the Secretary of the Treasury to biennially submit (beginning in 2005) to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives a report with respect to qualified tax collection contracts under this section, prior to repeal by Pub. L. 114-94, div. C, title XXXII, §32102(f)(2), Dec. 4, 2015, 129 Stat. 1736.

Secretary of the Treasury

The term "Secretary of the Treasury" means the Secretary of the Treasury, personally, and shall not include any delegate of his.

Secretary

The term "Secretary" means the Secretary of the Treasury or his delegate.

fiscal year

The term "fiscal year" means an accounting period of 12 months ending on the last day of any month other than December.

levy

The term "levy" includes the power of distraint and seizure by any means.

person

The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.

taxable year

The term "taxable year" means the calendar year, or the fiscal year ending during such calendar year, upon the basis of which the taxable income is computed under subtitle A. "Taxable year" means, in the case of a return made for a fractional part of a year under the provisions of subtitle A or under regulations prescribed by the Secretary, the period for which such return is made.

taxpayer

The term "taxpayer" means any person subject to any internal revenue tax.