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Washington, D.C.—The head of the union representing Internal Revenue Service employees today welcomed pointed bipartisan questioning of Treasury Secretary John Snow about the administration’s proposal to contract out to private firms the collection of overdue taxes.

“The administration proposal to privatize tax collection is a disservice to the American public, and deserves the hard questions directed at the secretary today,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU), which represents some 97,000 IRS employees. The Secretary was testifying before the Senate Appropriations Subcommittee on Transportation and Treasury.

Under the administration’s plan, private firms would be permitted to collect overdue taxes while earning fees of as much as 25 percent of the amounts they collect.

During today’s hearing, Sen. Robert Byrd (D-WV) zeroed in on an NTEU analysis indicating that a modest investment in IRS resources would generate ten times as much revenue for Treasury than would turning over to private companies the collection of overdue taxes.

“If the analysis was incorrect, this was the administration’s opportunity to say so,” President Kelley said, “and the Secretary did not.”

The NTEU analysis, based on IRS figures, shows that an investment of $296 million in IRS collection activities would result in $9.47 billion in revenue—a return of $31 for every dollar invested. At the same time, the analysis shows that it would cost $3.1 billion for private companies to collect $13 billion in past due taxes, providing a return of only $3 for every dollar invested.

Sen. Byrd also questioned Secretary Snow about both the security of sensitive taxpayer information in the hands of private companies, and the failed 1996 effort to contract out such work to the private sector. That program resulted in numerous violations of the Fair Debt Collection Practices Act—including calls from debt collectors outside the time period permitted by law. One such call occurred at 4:19 a.m.

Sen. Arlen Specter (R-PA) joined Sen. Byrd in raising concerns about the administration proposal, in particular saying he is very concerned about the potential impact on taxpayers of aggressive actions by private debt collectors.

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