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Washington, D.C—In a letter to Internal Revenue Service (IRS) Commissioner Mark Everson, President Colleen M. Kelley of the National Treasury Employees Union (NTEU) said NTEU members at the agency have expressed their concern to her about the inclusion of taxpayer voting records, including political party affiliation, in material supplied by contractors for use in tax collection efforts.

Kelley, who has previously criticized IRS’s lack of contractor oversight, said it was inappropriate for an IRS contractor to be collecting and transmitting to the agency information on the political affiliation of taxpayers, which “raises an appearance of possible impropriety that could erode taxpayer confidence in the independence of our voluntary compliance system.”

In her letter, the NTEU leader said she has “the utmost respect for and confidence in IRS employees and their professionalism” in handling such information, emphasizing that they are the ones who brought the issue to light.

At the same time, Kelley said she was very surprised to learn that IRS leadership did not know about this practice. It was only after NTEU’s inquiry that IRS requested a review of the data it receives in connection with what it refers to as its asset locator program. Kelley said she was even more surprised to learn that IRS leadership found this practice to be appropriate.

While IRS employees clearly need as much relevant information as possible to ensure that non-filers, under-reporters and others are located and informed of their tax liabilities, the union leader said, “these employees also are keenly aware that taxpayers must trust that IRS actions are independent and not influenced by personal or political gain.”

She called the willingness of the IRS to approve the gathering of information about taxpayers’ political affiliations “yet another red flag” pointing directly at the agency leadership’s inability to appreciate the importance of privacy to taxpayers.

While the gathering of the political information does not seem to be related to any improper motives, but rather part of information readily available in the private marketplace, Kelley said, Congress should require that the IRS suspend its current use of this information and delay the impending award of tax collection contracts until it is clear what information tax collectors—whether federal employees or private companies—should be using.

IRS officials have repeatedly testified on Capitol Hill that the agency’s contract oversight capabilities are very strong and will ensure that private companies about to enter the federal tax collection arena will face close scrutiny, a claim that is unsupported by past practice.

“The IRS plan to hire private sector debt collectors already puts at risk a variety of personal and sensitive taxpayer information, including Social Security numbers,” Kelley said. “This latest revelation is yet another example of the IRS’s long history of poor contractor oversight.”

Under the IRS privatization plan, it would hire private sector debt collectors to seek repayment of tax debts—rather than have the work performed more effectively and efficiently by IRS employees—and pay the private companies a bounty of up to 25 percent of the money they collect. A similar effort in 1996 was so flawed that it led to cancellation of a further proposed program the following year.

To read President Kelley's letter to Commissioner Everson, visit www.nteu.org/doc/CMKletter.pdf.

To read the IRS's response, visit www.nteu.org/doc/IRSresponse.pdf.