Kelley to Offer Ways and Means Committee Close, Critical Look at IRS Tax Privatization Program

Press Release May 16, 2007

Washington D.C. — The leader of the union representing tens of thousands of Internal Revenue Service (IRS) employees will spell out for a key House committee next week the reasons for the union’s longstanding and strong opposition to use by the IRS of private debt collectors.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) has been an outspoken critic of the administration’s push to move as much federal work as possible to the private sector, and has been particularly critical of its efforts to take inherently government work—such as tax collections—out of the hands of accountable federal employees.

Her testimony on the IRS’s use of private sector debt collectors will be presented next Wednesday, May 23 to the House Ways and Means Committee, which is investigating the program.

“I am grateful for the leadership of Committee Chairman Rep. Charles Rangel in pursuing this important investigation,” President Kelley said. “Taking a hard look at the operation of this program will make it clear that the IRS should abandon it in the interests of America’s taxpayers.”

In announcing the hearing, Rep. Rangel (D-N.Y) called the use of private companies to collect federal income taxes “an affront to the integrity of our tax system,” adding that collecting taxes “is a basic government function and one that should not be assigned to profit-making businesses.”

The congressman emphasized, as has President Kelley, that the outsourcing of IRS tax collection duties “carries an unacceptably large risk that taxpayer rights will be trampled and their personal identities stolen.” He called it “unacceptable that taxpayers are footing the bill for a program that pays private companies up to a 25 percent bounty when the IRS can do the job for pennies on the dollar.”

NTEU has been instrumental in generating considerable and growing bipartisan opposition to the IRS program among members of Congress. At present, bills are pending in both the Senate (S. 335) and House (H.R. 685) that would effectively end this ill-advised program.

Less than two months ago, Rep. Rangel informed the IRS of his intent to pursue legislation that would either repeal or significantly modify agency authority for the program. At that time, Rep. Rangel—citing a variety of consumer complaints with the program in its initial stages—called on the IRS not to proceed with plans to hire additional private debt collectors this year.

Among other important matters impacting the IRS, President Kelley will focus attention on the fact that the IRS tax debt privatization effort isn’t cost-effective; that it undermines, through its payment of a bounty to companies based on the money they collect, the critical issue of taxpayer fairness; and the failed history of a previous attempt to implement such a program.

NTEU is the largest independent federal union, representing some 150,000 employees in 31 agencies and departments.

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