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Washington, D.C.—The leader of the National Treasury Employees Union (NTEU) today warned that taxpayers are facing two harsh blows from the Internal Revenue Service that will wipe out a great many of the important gains the agency has made in its customer service in recent years.

The agency’s planned cutback in assistance to America’s taxpayers is coming as the agency gears up a broad-based increase in enforcement efforts aimed at generating additional revenue.

But what the IRS is doing “is the classic example of being penny-wise and pound-foolish,” NTEU President Colleen M. Kelley said at a press briefing on IRS-related matters as the tax-filing deadline approaches. The union leader said that far from increasing tax revenue, the IRS plan to sharply cut back its customer service efforts “will have the effect of reducing taxpayer compliance” with their obligations by making things much more difficult for taxpayers.

In recent congressional testimony, IRS Commissioner Mark Everson has said the agency plans to close up to 105 of its walk-in Taxpayer Assistance Centers (TACs)—that would incur the loss of as many as 700 jobs, Kelley said—and cut back its toll-free taxpayer telephone service, reducing it by 15 hours a week and closing call sites in Boston, Houston and Chicago. These are facilities that take taxpayer calls on a variety of tax-related issues.

IRS TAC employees are stationed in every state and the District of Columbia. Among their many duties in assisting taxpayers, they answer tax law and general tax questions, resolve account problems including collection cases, help with tax return preparation, assist in completing alien clearance forms and prepare installment payment agreements.

President Kelley said the popularity of these centers is evident not only in the number of people who visit them for help year-around—7.7 million annually, according to the IRS—but by the long lines that form at many TACs during tax-filing season even before they open in the mornings. The impact would be particularly hard on taxpayers who have limited or no proficiency in English, she said, or who do not have access to the Internet.

J. Russell George, the Treasury Inspector General for Tax Administration (TIGTA) recently testified before Congress that TIGTA is skeptical that the IRS has sufficient data to assess—and may have underestimated—the effect the TAC closings will have on customer service. What is lacking is information on taxpayer behavior, George said, and whether taxpayers will pursue other options for help, file improper returns, or worse, give up and not file taxes.

In testimony on the IRS fiscal year 2006 budget to be submitted to the House Ways and Means Oversight Committee tomorrow, President Kelley is sharply critical of the administration’s proposal to cut more than $134 million from IRS customer service functions—including 1,385 positions. Eighty-seven percent of the employees in these positions, she will tell the committee, deal directly with taxpayers and their representatives.

The NTEU leader will call on Congress to join in NTEU’s commitment to work with IRS management to increase both efficiency and customer satisfaction. The union, she said, “is committed to striking a balance among taxpayer satisfaction, business results and employee satisfaction.” These are the three measures of IRS success that formed the basis for a massive agency restructuring that began in 1998.

Even as she raised concern about the TAC and call site-closing plan, President Kelley repeated her assertion that the IRS is making yet another mistake in its plans to hire private sector debt collectors to collect tax debts. This “risky scheme,” she said, “clearly puts private and sensitive taxpayer information at serious risk” without any meaningful offsetting gain. “It simply isn’t worth it,” she said, stressing the union’s support for bipartisan legislation introduced in the House today that would revoke IRS authority to move ahead with the plan.

NTEU is the largest independent federal union, representing some 150,000 employees in 30 agencies and departments, including some 98,000 in the IRS.