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Washington, D.C.—With just a small investment of additional resources, the Internal Revenue Service can collect more than ten times as much in back taxes—more than $9 billion—and at less cost than the administration’s proposal to privatize tax debt collection, the leader of the union representing IRS employees told congressional lawmakers today.

“Let me be very clear,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU) in testimony to the House Ways and Means Oversight Committee. “NTEU strongly opposes hiring private tax collection agencies on a commission basis to collect taxes.” She said it would cost taxpayers far less to have IRS employees perform the work—and would keep sensitive taxpayer data out of the hands of private companies.

The collection cost analysis cited by President Kelley was put together last September by former IRS Commissioner Charles O. Rossotti in a report to the IRS Oversight Board. It said that if Congress would appropriate an additional $296 million to allow the IRS to hire more compliance employees, the agency could collect $9.47 billion in known tax debts annually. That would be a $31 return for every dollar spent.

President Kelley contrasted that return to what she called the administration’s “costly and risky scheme” to contract out to private companies the collection of tax debts in return for up to 25 percent of the funds collected. That proposal, she said, would cost some $3.25 billion to collect $13 billion—a return of only a net $3 for every dollar spent, barely one-tenth of what IRS employees could accomplish.

The Rossotti report also found that while the IRS workload increased by 16 percent over a decade, the number of full time agency employees dropped from some 115,000 to about 95,000—including a disproportionate 28 percent decline in compliance personnel.

The NTEU leader also took sharp issue with the administration’s proposal in light of the IRS’s recent history of contractor oversight failures. She cited a number of examples, including a private contractor deceiving the IRS about the qualifications of bomb-sniffing dogs hired to protect an IRS facility in California, and Mellon Bank losing or destroying some 78,000 taxpayer checks worth more than $1.2 billion.

President Kelley pointed to a 1996 tax collection pilot project, which resulted in contractor violations of the Fair Debt Collection Practices Act—hundreds of completed calls were placed to taxpayers outside of the time period specified by the law, including calling at 4 a.m.—along with significant failures to protect confidential and sensitive taxpayer information, she said. That pilot was so bad that it led to the cancellation of another collection pilot planned for the following year.

These and other documented examples of abuse and failure by private contractors underscore IRS’s continuing lack of effective contractor oversight, and the importance of Congress soundly rejecting the administration’s contracting out proposal, she said.

“Instead of rushing to privatize,” the NTEU leader said, “the IRS should make the necessary investments today in increased staffing, resources and better training so that the compliance gap can be closed without compromising taxpayer rights.”

“Tax collection has historically been defined as an inherently governmental function,” she said, “and private contractors have been prevented from bidding for this work.” She strongly urged Congress to continue that prohibition by rejecting the proposed legislation that would permit it.

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