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Washington, D.C.—Congressional opposition to use by the Internal Revenue Service (IRS) of private debt collectors continued to grow today with the introduction of legislation by a member of the Senate Appropriations Committee that would prevent the agency from using private companies to pursue tax debts.

The bill—S. 3887, introduced by Sen. Byron Dorgan (D-N.D.)—has eight co-sponsors, including Sen. Patty Murray (D-Wash.), Ranking Member of the Transportation-Treasury Appropriations Subcommittee, which has jurisdiction over the IRS.

Despite the clear opposition in Congress to the plan, which includes a House-approved ban on the use of fiscal 2007 funding to pay for it, the IRS is moving ahead. The agency is believed to have assigned some 12,500 taxpayer files to three private debt collectors last Thursday—with plans to boost that number to 40,000 such cases by the end of this year.

Further, the IRS was expected to send a letter and brochure to impacted taxpayers last Saturday, to be followed by a letter from the private collectors to be sent tomorrow. The collection calls to taxpayers are set to begin this Friday.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU), who has been leading the fight against the IRS privatization program, welcomed the Dorgan legislation. “At some point,” she said, “the weight of all the opposition to this unwise and costly plan will be so great that even the IRS won’t be able to ignore it any longer.”

In addition to the 2007 spending ban, there is pending legislation in the House—H.R. 1621—that would revoke the authority of the IRS to hire debt collectors. Along with many members of Congress, both internal IRS operations, like the National Taxpayer Advocate, and outside groups such as the Taxpayer Advocacy Panel, a volunteer federal advisory body, have raised serious concerns with the program’s cost and the risk to taxpayers’ personal and sensitive information.

Under the plan, private debt collectors will be paid a bounty of up to 24 percent of the money they collect. Sen. Dorgan and Sen. Murray—among other critics of the plan—have cited the cost as one reason for their opposition.

“It is astounding,” Sen. Dorgan said, “that the IRS appears ready to pay nearly a quarter of every dollar collected by private collection firms, when internal IRS reports suggest that it would cost the federal government just three pennies on the dollar to have trained IRS employees collect tax debts.”

Sen. Murray, who last week sent a letter to IRS Commissioner Mark Everson opposing the plan, said that she intends to offer an amendment to the Senate version of the Transportation-Treasury funding bill “that would effectively prohibit the IRS from going forward with this initiative.” The Senate has yet to take up its version of the bill.

Among her concerns, she said, is “the likely result” that the private debt collectors will pursue “the most vulnerable taxpayers in our society.” She added: “We should not allow a system to emerge where better-off taxpayers get the benefit of interacting with a professional IRS (employee), while economically-disadvantaged taxpayers are relegated to the harassing tactics of private collection agencies.”

The Washington Democrat repeated her assertion, made by several of her colleagues, that the IRS should not be moving ahead with this plan “while Congress is still debating its merits.” The agency, she said, “should suspend this effort immediately until the Congress has debated its fate and reached a final judgment.”

In addition to Sen. Murray, the Dorgan bill is co-sponsored by Senators Barbara Mikulski (D-Md.), Patrick Leahy (D-Vt.), Dianne Feinstein (D-Ca.), Daniel Akaka (D-Hawaii), John Kerry (D-Mass.), Edward Kennedy (D-Mass.) and Joseph Lieberman (D-Conn.).

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