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Washington, D.C.—A meaningful effort to close the more than $345 billion tax gap requires that Congress and the Internal Revenue Service (IRS) adopt a two-part strategy of hiring more frontline employees for tax compliance and enforcement and providing a dedicated funding stream to ensure adequate resources, the leader of the union representing IRS employees said today.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) offered that assessment in testimony submitted to the Senate Finance Subcommittee on Taxation and IRS Oversight in advance of a “tax gap” hearing scheduled tomorrow.

“Rather than move forward with its plans to drastically cut customer service in order to expand its enforcement role,” President Kelley said, “the IRS needs to strike a balance between offering adequate opportunities for taxpayers to voluntarily comply and enforcing the tax code.”

She added: “I would emphasize that the IRS should determine those factors which encourage and enable taxpayers to voluntarily comply as well as determine the reasons for non-compliance. The IRS has the expertise to improve compliance, but lacks the necessary personnel.”

As to the dedicated funding stream, President Kelley argued that “it is clear that dollars spent on IRS compliance efforts return exponentially more to the Treasury. We must create a process that provides those dollars regardless of arcane congressional budgeting rules if we are going to make progress on closing the tax gap.” The tax gap is the difference between the amount of taxes due and those taxes actually paid. Each one percent reduction in the tax gap results in more than $3 billion in federal revenue.

The NTEU leader repeated her consistent criticisms of the approach the IRS is taking to boosting collections—the hiring of private sector debt collectors to pursue tax debts in exchange for a bounty of up to 25 percent of the money they collect.

“Privatizing tax collection is the wrong approach for the IRS and is not the most efficient or effective way to decrease the tax gap or increase taxpayer satisfaction,” she said. “This plan will merely make confidential tax information vulnerable to fraud and abuse, anger taxpayers who are approached by (private debt collectors) and cost the government more money than if the work were left in the capable hands of IRS employees.”

On a closely-related matter, President Kelley underscored her criticisms of a day earlier over an IRS plan to cut by nearly half the number of its estate and gift tax attorneys by the Sept. 30 end of the fiscal year. “Given the size of the tax gap and the amount of money estate and gift tax attorneys generate for the Treasury, it simply doesn’t make sense” to cut back in that function, she said, pointing out that a senior IRS official told the media that these professionals find an average of $2,200 in taxes owed to the government for each hour they work.

The NTEU leader also criticized agency efforts to cut back customer service as a means of strengthening enforcement. “Customer service is a critical part of the compliance equation,” she said. “The IRS must not be allowed to slash customer service this year, or next year, for the sake of bolstering enforcement.” NTEU has successfully fought such IRS efforts over the past two years.

NTEU is the largest independent federal union, representing some 150,000 federal workers in 30 agencies and departments, including 94,000 in the IRS.