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Washington, D.C.—The head of the National Treasury Employees Union (NTEU) today called on the Internal Revenue Service (IRS) both to fully disclose the criteria it is using to select private companies to pursue tax debts and to do a much better job of informing taxpayers about the plan to turn their information over to private debt collectors and their rights when confronted by collection agents over taxes due.

To that latter end, NTEU President Colleen M. Kelley said the union is launching a new consumer-oriented Internet web site designed to provide information to help keep taxpayers abreast of the IRS program of hiring private sector debt collection companies to pursue tax debts in exchange for a bounty of up to 25 percent of the money they collect. The IRS has selected three companies, but plans to select 10 companies within the next year or so.

“The IRS has done a terrible job of informing the public about this unwise and unnecessary program of privatizing tax debt collection,” President Kelley said. “If the agency isn’t going to be upfront with taxpayers, NTEU will fill that void.” The new web site will be www.nteuIRSwatch.org.

The union’s new web site will detail the IRS plans to contract out the government’s tax collection work and—when the information is made available—inform taxpayers of their rights when contacted by a debt collector on behalf of the IRS; President Kelley has been leading the fight against the privatization effort by the IRS.

“Information about taxpayers’ rights under this program is almost nonexistent. It is our understanding that, once contacted, taxpayers will have to inform the IRS in writing that they do not want to deal with the debt collector,” said Kelley. “Of course, by the time their information is turned over to the debt collectors, it will be far too late for taxpayers to protect their privacy,” she noted.

“Every year,” the NTEU leader said, “the debt collection industry draws more consumer complaints to the Federal Trade Commission than any other—more than 58,000 last year alone. It is critical that taxpayers have information about their rights.”

The tax debt privatization program was slated to begin this summer, with information from a large number of tax returns to be provided to three private sector firms selected by the IRS. The program, however, has run into roadblocks and is delayed; two losing private sector debt collection companies filed protests of the IRS contract award to the three firms, thus triggering the delay while the Government Accountability Office (GAO) investigates.

One of the three firms initially selected by the IRS, out of 33 vying for the work, had documented legal issues dealing with collections. “There needs to be full disclosure by the IRS of the criteria it used in making these initial selections,” Kelley said. “The fact that this unwise program is essentially operating in the dark is yet another reason to drop it.”

The project will require careful monitoring, said Kelley. In congressional testimony, the Treasury Inspector General pointed to an ongoing investigation in the state of New Jersey where the privatization of debt collection spawned a culture of corruption over a 12-year period in the Divisions of Taxation and Revenue, according to a state investigation.

NTEU, which has promised to closely monitor every step of the tax debt privatization program, is strongly supporting bipartisan legislation—H.R. 1621—that would revoke the authority of the IRS to hire private sector debt collectors to pursue tax debts.

NTEU is the largest independent federal union, representing some 150,000 federal workers in 30 agencies and departments, including 90,000 in the IRS.