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Washington, D.C.—The leader of the union representing Internal Revenue Service employees today sharply criticized IRS proposals to collect taxes using private collection agencies and a proposal to lay off several thousand agency employees.

“The greatest barrier to making cost-effective investment in the IRS workforce is the agency’s increased attempts to outsource the IRS’s inherently governmental functions to private contractors,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU.)

She added: “The agency’s plan to privatize tax collection services, which has already been tested and failed, puts private taxpayer information at risk and is less cost-effective than increasing IRS tax collection efforts.”

President Kelley offered her assessment in wide-ranging testimony before the IRS Oversight Board, a nine-member public-private body charged with a number of important responsibilities affecting the IRS, including budgeting and strategic planning.

In emphasizing NTEU’s strong opposition to the tax collection privatization proposal, Kelley criticized the agency’s intent to pay private sector debt collectors a commission of up to 25 percent of the money they collect.

Kelly Oversight Board Testimony

“It is plain and simple,” Kelley said. “This plan to privatize tax collection work at the IRS will hurt U.S. taxpayers and IRS workers.”

President Kelley also attacked an IRS proposal that would result in a reduction-in-force of some 1,600 Case Processing and Insolvency employees in 92 locations around the country, with the work to be centralized in four locations—and a proposed RIF of some 2,200 employees at the Memphis Submissions Processing Center.

“It is unfortunate that the IRS is using the excuse of bolstering compliance to justify” its proposed RIF in Case Processing and Insolvency, she said, noting that “there is no evidence of cost savings” from the planned move, and calling the IRS’s business case assumptions “faulty.” She urged the agency “to keep its employees in the field, serving local taxpayers.”

The NTEU leader also criticized the agency for “using unrealistic, overly optimistic assumptions to project the increase in electronic tax return filing,” then using those assumptions to justify its proposed Memphis RIF. The General Accounting Office (GAO) has said the IRS will fall significantly short of its goals for electronic tax-filing.

On another important matter, President Kelley said the only way to generate increased taxpayer compliance with the nation’s tax laws is for Congress and the administration to support additional resources for the IRS.

Forcing IRS employees to do more work without additional resources “is unrealistic and unfair.” Improving customer service, enhancing tax return processing and increasing tax compliance “will occur only if Congress and the administration support increased funding for staffing, advanced technology and equipment, and better training,” she said.

President Kelley also emphasized again the negative impact on the agency and its employees of a provision in the 1998 IRS restructuring law that unfairly threatens IRS workers with loss of their jobs.

NTEU is the largest independent federal union, representing some 150,000 employees in 29 agencies and departments, including more than 98,000 in the IRS.

For more information, visit the NTEU web site at www.nteu.org