Home Media Center News Releases

Washington, D.C.—The leader of the union representing tens of thousands of Internal Revenue Service employees today called “an important step in the right direction” approval by the full House of Representatives of an amendment that would help safeguard the privacy of taxpayer information by preventing the IRS from hiring private contractors to collect taxes.

The amendment to H.R. 5025, the fiscal 2005 Transportation, Treasury and Independent Agencies funding bill, was offered by Rep. Shelley Moore Capito (R-WV). During the House debate, there was strong bipartisan support for the amendment which would prevent the agency from using any funds to contract with private debt collectors to collect tax debts.

Rep. Capito had warned her colleagues that “the privacy issues and potential for harm inherent (in the use of private tax collectors) should be cause for alarm.”

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) praised Rep. Capito’s leadership in protecting the private and sensitive information of America’s taxpayers and safeguarding them from overly aggressive tax collection efforts. She also thanked Rep. Chris Van Hollen (D-MD), who last year proposed a resolution opposing tax debt privatization.

President Kelley has been leading the fight not only against privatizing tax collection but against the administration’s continuing efforts to contract to the private sector as many as one out of every two federal jobs.

In a letter supporting the Capito amendment, Kelley had urged House members “to keep sensitive taxpayer information safe and out of the hands of private contractors.” She reminded

representatives of the failed history of such efforts by the IRS—including a disastrous pilot program of tax debt privatization in 1996 that was so flawed it led to the cancellation of a further proposed program in 1997.

The NTEU leader took issue with IRS assurances that it has learned from its past mistakes and can now better manage its contractors. On the contrary, she told House members, a report earlier this summer by the Treasury Inspector General for Tax Administration (TIGTA) showed clearly how IRS contractors put taxpayer data at risk.

Kelley quoted the TIGTA audit as finding both that the “lack of oversight of contractors resulted in serious security vulnerabilities” and that “contractors blatantly circumvented IRS policies and procedures even when security personnel identified inappropriate practices.”

“Given the widespread identity theft that occurs today,” Kelley said, “I wouldn’t think any elected official would want to support any kind of program that puts vital and private taxpayer information at risk—as this one so clearly does.”

In addition to warning about the security of sensitive information, President Kelley emphasized that the proposal to pay debt collectors a bounty of up to 25 percent of the money they collect makes no fiscal sense. The IRS itself has said that, given a modest increase in enforcement resources, agency employees could collect more than $9 billion—or nearly 10 times as much as private debt collectors.

Kelley’s views were echoed by Rep. Capito. The Republican congresswoman noted that the costs of the 1996 pilot program far outweighed the benefits. She called that “inefficient government.”

NTEU is the largest independent federal union, representing some 150,000 employees in 30 agencies and departments, including some 98,000 in the IRS.