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Washington, D.C.—The National Treasury Employees Union (NTEU) is strongly supporting efforts to strip from the Senate tax bill, currently under consideration, language that would allow private collection agencies to collect overdue taxes in return for a commission of up to 25 percent.

In a letter to every member of the Senate, NTEU President Colleen M. Kelley urged support for an amendment to the pending tax bill to be offered by Sen. Byron Dorgan (D-ND) that would eliminate language permitting the Internal Revenue Service to contract out tax debt collection work.

“This (collection) proposal will cost the taxpayers more money than having this work done by IRS employees,” President Kelley wrote, “and will jeopardize the rights and privacy of thousands of taxpayers.”

The NTEU president also expressed concern about the agency’s poor track record of private contract oversight. In fact, she recounted for senators the history of a failed 1996 effort of a pilot program to privatize tax collection and warned of the kind of aggressive treatment of taxpayers by private collection agencies that showed up in an audit of that program. Abusive treatment of taxpayers, she said, is “the exact dynamic” the IRS Restructuring and Reform Act of 1998 “sought to avoid.”

She emphasized the position taken by former IRS Commissioner Charles O. Rossotti in a report to the IRS Oversight Board last September in which he made it clear that with the modest investment

of additional resources, IRS employees could recover more than ten times the money projected to be collected under the administration’s for-profit scheme.

The private tax collection proposal in the Senate tax bill is projected to bring in $973 million over 10 years at a cost of up to $250 million. “IRS employees could bring in $973 million in one year with an investment of just $30 million, clearly a better deal for taxpayers,” President Kelley said.

“The risks of paying contractors to collect taxes are enormous,” Kelley wrote to the senators. “Instead of rushing to privatize tax collection functions and putting taxpayer information in the hands of private collectors,” she wrote, “the IRS should increase compliance staffing levels so that the compliance gap can be closed without compromising taxpayer rights.”

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