26 U.S.C. § 6306 — Qualified tax collection contracts

Page 3554 TITLE 26—INTERNAL REVENUE CODE § 6305 Statutory Notes and Related Subsidiaries EFFECTIVE DATE Pub. L. 105–206, title III, § 3466(c), July 22, 1998, 112 Stat. 769, provided that: ‘‘The amendments made by this section [enacting this section] shall take effect on the date of the enactment of this Act [July 22, 1998].’’ § 6305. Collection of certain liability (a) In general Upon receiving a certification from the Sec- retary of Health and Human Services, under sec- tion 452(b) of the Social Security Act with re- spect to any individual, the Secretary shall as- sess and collect the amount certified by the Sec- retary of Health and Human Services, in the same manner, with the same powers, and (except as provided in this section) subject to the same limitations as if such amount were a tax im- posed by subtitle C the collection of which would be jeopardized by delay, except that— (1) no interest or penalties shall be assessed or collected, (2) for such purposes, paragraphs (4), (6), and (8) of section 6334(a) (relating to property ex- empt from levy) shall not apply, (3) there shall be exempt from levy so much of the salary, wages, or other income of an in- dividual as is being withheld therefrom in gar- nishment pursuant to a judgment entered by a court of competent jurisdiction for the sup- port of his minor children, (4) in the case of the first assessment against an individual for delinquency under a court or administrative order against such individual for a particular person or persons, the collec- tion shall be stayed for a period of 60 days im- mediately following notice and demand as de- scribed in section 6303, and (5) no additional fee may be assessed for ad- justments to an amount previously certified pursuant to such section 452(b) with respect to the same obligor. (b) Review of assessments and collections No court of the United States, whether estab- lished under article I or article III of the Con- stitution, shall have jurisdiction of any action, whether legal or equitable, brought to restrain or review the assessment and collection of amounts by the Secretary under subsection (a), nor shall any such assessment and collection be subject to review by the Secretary in any pro- ceeding. This subsection does not preclude any legal, equitable, or administrative action against the State by an individual in any State court or before any State agency to determine his liability for any amount assessed against him and collected, or to recover any such amount collected from him, under this section. (Added Pub. L. 93–647, § 101(b)(1), Jan. 4, 1975, 88 Stat. 2358; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 97–35, title XXIII, § 2332(g), Aug. 13, 1981, 95 Stat. 862; Pub. L. 104–193, title III, § 361(a), Aug. 22, 1996, 110 Stat. 2242.) Editorial Notes REFERENCES IN TEXT Section 452(b) of the Social Security Act, referred to in subsec. (a), is classified to section 652(b) of Title 42, The Public Health and Welfare. AMENDMENTS 1996—Subsec. (a). Pub. L. 104–193, § 361(a)(4), sub- stituted ‘‘Secretary of Health and Human Services’’ for ‘‘Secretary of Health, Education, and Welfare’’ in two places in introductory provisions. Subsec. (a)(5). Pub. L. 104–193, § 361(a)(1)–(3), added par. (5). 1981—Subsec. (a)(4). Pub. L. 97–35 inserted reference to administrative order. 1976—Subsecs. (a), (b). Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1996 AMENDMENT Pub. L. 104–193, title III, § 361(b), Aug. 22, 1996, 110 Stat. 2242, provided that: ‘‘The amendments made by this section [amending this section] shall become effec- tive October 1, 1997.’’ For provisions relating to effective date of title III of Pub. L. 104–193, see section 395(a)–(c) of Pub. L. 104–193, set out as a note under section 654 of Title 42, The Pub- lic Health and Welfare. EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–35 effective, except as oth- erwise specifically provided, on Oct. 1, 1981, see section 2336 of Pub. L. 97–35, set out as a note under section 651 of Title 42, The Public Health and Welfare. EFFECTIVE DATE Section effective Aug. 1, 1975, see section 101(f) of Pub. L. 93–647, set out as a note under section 651 of Title 42, the Public Health and Welfare. § 6306. Qualified tax collection contracts (a) In general Nothing in any provision of law shall be con- strued to prevent the Secretary from entering into a qualified tax collection contract. (b) Qualified tax collection contract For purposes of this section, the term ‘‘quali- fied tax collection contract’’ means any con- tract 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 tax- payer of an amount of Federal tax specified by the Secretary and, if such request cannot be met by the taxpayer, to offer the tax- payer an installment agreement providing for full payment of such amount during a pe- riod not to exceed 7 years, and (C) to obtain financial information speci- fied 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 Sec- retary. Page 3555 TITLE 26—INTERNAL REVENUE CODE § 6306 (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 col- lection of all outstanding inactive tax receiv- ables. (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 In- ternal Revenue Service removes such re- ceivable from the active inventory for lack of resources or inability to locate the tax- payer, (ii) more than 2 years has passed since assessment and such receivable has not been assigned for collection to any em- ployee 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 receiv- able. (B) Tax receivable The term ‘‘tax receivable’’ means any out- standing assessment which the Internal Rev- enue Service includes in potentially collect- ible inventory. (d) Certain tax receivables not eligible for collec- tion under qualified tax collections contracts A tax receivable shall not be eligible for col- lection 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 Sec- retary 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 bene- fits under section 223 of the Social Security Act or supplemental security income bene- fits 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 in- formation is available, which does not ex- ceed 200 percent of the applicable poverty level (as determined by the Secretary), (4) is currently under examination, litiga- tion, 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 re- garding 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 serv- ices 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 collec- tion centers on the schedule required under sec- tion 3711(g) of title 31, United States Code, in- cluding the technology and communications in- frastructure established therein, to the extent such private collection contractors and debt col- lection 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 sec- tion 165(i)(5)) may request— (1) relief from immediate collection meas- ures 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 enact- ment of this subsection), the Secretary shall submit to the Committee on Ways and Means of the House of Representatives and the Com- mittee 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 re- ceivables 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 In- ternal Revenue Service with respect to such amounts, Page 3556 TITLE 26—INTERNAL REVENUE CODE § 6306 (C) the impact of such contracts on the total number and amount of unpaid assess- ments, and on the number and amount of as- sessments collected by Internal Revenue Service personnel after initial contact by a contractor, (D) the amount of fees retained by the Sec- retary 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 re- port submitted under this subsection)— (A) an independent evaluation of con- tractor performance, and (B) a measurement plan that includes a comparison of the best practices used by the private collectors to the collection tech- niques used by the Internal Revenue Service and mechanisms to identify and capture in- formation on successful collection tech- niques used by the contractors that could be adopted by the Internal Revenue Service. (k) Cross references (1) For damages for certain unauthorized collec- tion 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). (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 TEXT The 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 clas- sified generally to subchapter V (§ 1692 et seq.) of chap- ter 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. AMENDMENTS 2019—Subsec. (b)(1)(B). Pub. L. 116–25, § 1205(c), sub- stituted ‘‘7 years’’ for ‘‘5 years’’. Subsec. (c)(2)(A)(ii). Pub. L. 116–25, § 1205(b), sub- stituted ‘‘more than 2 years has passed since assess- ment’’ 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 sub- sec. (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 Sec- retary (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 per- sonnel program account after the date of the enact- ment 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 sub- sections (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 de- scribed 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 Sec- retary [probably means Secretary of the Treasury] after the date of the enactment of this Act [Dec. 4, 2015].’’ EFFECTIVE DATE Pub. L. 108–357, title VIII, § 881(f), Oct. 22, 2004, 118 Stat. 1627, provided that: ‘‘The amendments made to [by] this section [enacting this section and section Page 3557 TITLE 26—INTERNAL REVENUE CODE § 6307 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, title VIII, § 881(e), Oct. 22, 2004, 118 Stat. 1627, directed the Secretary of the Treasury to bi- ennially 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. § 6307. Special compliance personnel program ac- count (a) Establishment of a special compliance per- sonnel program account The Secretary shall establish an account with- in the Department for carrying out a program consisting of the hiring, training, and employ- ment of special compliance personnel, and shall transfer to such account from time to time amounts retained by the Secretary under sec- tion 6306(e)(2). (b) Restrictions The program described in subsection (a) shall be subject to the following restrictions: (1) No funds shall be transferred to such ac- count except as described in subsection (a). (2) No other funds from any other source shall be expended for special compliance per- sonnel employed under such program. (3) Notwithstanding any other authority, the Secretary is prohibited from spending funds out of such account for other than program costs. (c) Reporting Not later than March of each year, the Com- missioner of Internal Revenue shall submit a re- port to the Committees on Finance and Appro- priations of the Senate and the Committees on Ways and Means and Appropriations of the House of Representatives consisting of the fol- lowing: (1) For the preceding fiscal year, all funds received in the account established under sub- section (a), administrative and program costs for the program described in such subsection, the number of special compliance personnel hired and employed under the program, and the amount of revenue actually collected by such personnel. (2) For the current fiscal year, all actual and estimated funds received or to be received in the account, all actual and estimated adminis- trative and program costs, the number of all actual and estimated special compliance per- sonnel hired and employed under the program, and the actual and estimated revenue actually collected or to be collected by such personnel. (3) For the following fiscal year, an estimate of all funds to be received in the account, all estimated administrative and program costs, the estimated number of special compliance personnel hired and employed under the pro- gram, and the estimated revenue to be col- lected by such personnel. (d) Definitions For purposes of this section— (1) Special compliance personnel The term ‘‘special compliance personnel’’ means individuals employed by the Internal Revenue Service as field function collection officers or in a similar position, or employed to collect taxes using the automated collec- tion system or an equivalent replacement sys- tem. (2) Program costs The term ‘‘program costs’’ means— (A) total salaries (including locality pay and bonuses), benefits, and employment taxes for special compliance personnel em- ployed or trained under the program de- scribed in subsection (a), (B) direct overhead costs, salaries, bene- fits, and employment taxes relating to sup- port staff, rental payments, office equipment and furniture, travel, data processing serv- ices, vehicle costs, utilities, communica- tions, software, technology, postage, print- ing and reproduction, supplies and mate- rials, lands and structures, insurance claims, and indemnities for special compliance per- sonnel hired and employed under this sec- tion, and (C) reimbursement of the Internal Revenue Service or other government agencies for the cost of administering the qualified tax collection program under section 6306. For purposes of subparagraph (B), the cost of management and supervision of special com- pliance personnel shall be taken into account as direct overhead costs to the extent such costs, when included in total program costs under this paragraph, do not represent more than 10 percent of such total costs. (Added Pub. L. 114–94, div. C, title XXXII, § 32103(b), Dec. 4, 2015, 129 Stat. 1736; amended Pub. L. 116–25, title I, § 1205(d), July 1, 2019, 133 Stat. 989.) Editorial Notes AMENDMENTS 2019—Subsec. (b)(2). Pub. L. 116–25, § 1205(d)(1)(A), sub- stituted period for ‘‘, and no funds from such account shall be expended for the hiring of any personnel other than special compliance personnel.’’ Subsec. (b)(3). Pub. L. 116–25, § 1205(d)(1)(B), sub- stituted ‘‘for other than program costs.’’ for ‘‘for any purpose other than for costs under such program asso- ciated with the employment of special compliance per- sonnel and the retraining and reassignment of current noncollections personnel as special compliance per- sonnel, and to reimburse the Internal Revenue Service or other government agencies for the cost of admin- istering qualified tax collection contracts under sec- tion 6306.’’ Subsec. (d)(2)(B). Pub. L. 116–25, § 1205(d)(2), sub- stituted ‘‘communications, software, technology’’ for ‘‘telecommunications’’. Subsec. (d)(2)(C). Pub. L. 116–25, § 1205(d)(3), added sub- par. (C). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2019 AMENDMENT Amendment by Pub. L. 116–25 applicable to amounts expended from the special compliance personnel pro- gram account after July 1, 2019, see section 1205(e)(3) of Pub. L. 116–25, set out in a note under section 6306 of this title.