Congress has a new idea to raise money: report unpaid taxes to credit bureaus. Currently, unpaid taxes and existing tax debts are not reported thanks to a law which gives taxpayers privacy in their private finances. Only liens on property, such as a home, are made public and such liens do become part of an individual's credit report.
Unpaid taxes amount to $373.2 billion for all individuals and businesses in the United States. Reporting these debts to credit bureaus, Congress believes, might increase the public's willingness to repay existing debts. It might also encourage taxpayers to avoid improper filings so as to avoid a situation in which the taxpayer owes debts to the IRS.
Resistance is strong. Taxpayer advocates say that the proposal might unfairly hurt borrowers who have inaccurate information on their credit reports. While the IRS isn't exactly known for inaccuracies, the credit bureaus certainly are; a false report of an IRS debt could significantly affect someone's ability to borrow for a home, get a job, or even get insurance for their car.
So far, public opinion isn't supportive of the change. For many facing erroneous credit report information and difficulties that stem from incorrect information, the risk of an incorrect IRS report is simply too high.
Congress has not yet voted on the proposal and it is still working with the GAO and tax authorities before bringing it to vote. Early news suggests that the bill will not pass if left to a vote, however, the only testimony thus far has been against the idea. The support for such a change has a very big motivation behind it: the $373 billion of taxes left unpaid.