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Washington, D.C.—The National Treasury Employees Union (NTEU) offered its strong support for bipartisan legislation introduced in the House today by Reps. Rob Simmons (R-CT) and Chris Van Hollen (D-MD) that would prevent the Internal Revenue Service from hiring private sector debt collection companies to collect tax debts. The bill—the Simmons-Van Hollen Taxpayer Protection Act of 2005—also has a large bipartisan group of original co-sponsors.

“The Taxpayer Protection Act would undo a serious mistake,” NTEU President Colleen M. Kelley said. “Using private sector debt collectors to collect federal taxes makes no sense. It not only generates real dangers for vital taxpayer privacy, it also returns fewer dollars to the U.S. Treasury than would federal employees doing this work.”

NTEU, which represents some 98,000 IRS employees, has been leading the fight against the privatization of tax collections, arguing—as does the Simmons-Van Hollen bill—that such actions raise substantial risks to the privacy of personal and sensitive taxpayer information and opens taxpayers to the worst abuses of the collection industry.

The IRS, this month, is gearing up to begin such a program; it was authorized to do so by Congress last year, but not by a vote on the merits of the proposal. The tax debt privatization idea instead was added to an unrelated corporate tax bill. Under it, private sector debt collectors would be entitled to a bounty of up to 25 percent of the money they collect and there is no requirement that the work be performed in the United States.

In urging passage, Rep. Simmons emphasized that individual taxpayers voluntarily disclose their personal information to the federal government “with the expectation that such information will be utilized and retained only by the qualified, trained and accountable personnel” of the IRS.

Moreover, the congressman pointed out that over the past 15 years, more than 26 million Americans have been the victims of some form of identity theft. He said that providing vital tax-related

information to third party vendors—like private sector debt collectors—would only increase the risk of wrongful disclosure of such data.

For his part, Rep. Van Hollen expressed his serious concern over the continuing inability of the IRS to oversee the work of its private contractors. He cited a report on that subject by the Treasury Inspector General for Tax Administration (TIGTA) finding that IRS contractors “blatantly circumvented IRS policies and procedures even when security personnel identified inappropriate practices.”

Rep. Van Hollen added that the IRS tax privatization plan “sets a dangerous precedent down a path of contractor abuse and taxpayer distrust.”

Debt collectors make up the most complained-about industry in America, generating more than 34,500 consumer complaints to the Federal Trade Commission last year. When a similar plan was tried by the IRS in 1996, its contractors were found to have committed numerous violations of the Fair Debt Collection Practices Act, including calls to taxpayers before 8 a.m. and after 9 p.m.—both of which are prohibited by the statute. One call was made at 4:19 a.m.

In line with that history, NTEU has pointed out that as far back as 1986, the Reagan administration opposed the concept of privatizing tax collections. The Treasury Department warned then of considerable adverse public reaction to such a plan, and emphasized the importance of not compromising the integrity of the tax system, which is a longstanding inherently governmental function.

The House previously has signaled its bipartisan disapproval of privatizing tax collections by passing legislation that would prevent the program from being authorized; however, under pressure from the administration, the language was removed in conference committee.

NTEU is encouraging taxpayers to protest the IRS’s use of private sector debt collectors to their representatives in Congress. The union has placed a sample letter to members of Congress on its web site, www.nteu.org, and is encouraging the American public to visit the web site and send Congress a message, urging support of the Taxpayer Protection Act of 2005 legislation.

NTEU is the largest independent federal union, representing some 150,000 employees in 30 agencies and departments.