IRS Contract Decision Opens Yet Another Avenue of Risk to Private Taxpayer Data

Press Release December 1, 2006

Washington, D.C.—A decision by the Internal Revenue Service (IRS) to turn over internal logistics services to a private contractor is another example of the agency’s continuing and dangerous willingness to put personal and private taxpayer information at risk, the leader of the union representing IRS employees said today.

“A key part of the function awarded today to a private contractor is the transport of thousands of taxpayer files from IRS service centers around the country to the Federal Records Center,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU). “This clearly is work that should stay in the hands of IRS employees.”

IRS logistics services, which includes material handlers, warehouse workers, motor vehicle operators, laborers, office appliance repair staffs and clerks, presently is performed by some 137 agency employees at ten locations.

“Many questions remain unanswered,” President Kelley said. “While NTEU believes this work is done very well by, and should continue to be done by, these employees, we will now be looking at the competition and the results in detail, and continuing to do all we can to move these 137 employees out of harm’s way.”

Earlier this year, NTEU negotiated a memorandum of understanding with the IRS concerning employee rights in connection with this public-private competition, and dealing with such vital matters as employee work records validation, reassignment preference notices, reduction-in-force training and outplacement services.

Now that the contract has been awarded, further negotiations will be undertaken to minimize the impact on employees—both those directly affected and those who might be impacted as a result of related provisions in the NTEU-IRS contract.

President Kelley noted the irony of the IRS contracting out the movement of private taxpayer files in the wake of last week’s announcement that a contractor responsible for receiving, filing and maintaining tax returns and related documents will not be able to meet the scheduled start date—tomorrow, Dec. 1—at five of seven sites, requiring the agency to scramble to staff this function after months of moving its own employees out of this work.

And she pointed to the continuing controversy over the agency’s determination to hire private sector debt collectors to pursue tax debts despite congressional opposition and growing concern within the IRS itself about both the high cost of the program and the built-in risks to taxpayers’ personal information, including their Social Security numbers.

“For an agency like the IRS, with such a poor record of contractor oversight, these actions are virtually open invitations to disaster for taxpayers,” Kelley said.

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

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