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Washington, D.C.—The leader of the nation’s largest independent union of federal workers today urged the House of Representatives to reject legislation that would allow the Internal Revenue Service to use private debt collectors to pursue tax debts. The provision is contained in an unrelated corporate tax bill approved by the House Ways and Means Committee last night.

The debt collection proposal “presents a very grave danger to taxpayer privacy, and is exceptionally cost-ineffective,” said National Treasury Employees Union (NTEU) President Colleen M. Kelley. NTEU, she said, will continue its efforts to keep the inherently governmental function of tax collection in the hands of IRS employees.

There is already considerable opposition to the proposal, which would pay private sector debt collectors a bounty of 25 percent of the money they collect. Less than two weeks ago, a group of 17 House Republican members asked its party leadership to stand firm in support of the House’s previous rejection of privatizing tax collections.

And earlier in June, NTEU was joined by a coalition of five major consumer and public interest groups in urging rejection of the idea, which puts the personal and sensitive tax information of the public in the hands of private sector debt collectors.

Opposition to the proposal is long-standing; in fact, the administration of President Ronald Reagan firmly rejected such a proposal nearly 20 years ago. At that time, the Treasury Department said “the public must be assured at all times that the person collecting taxes derives no personal benefit from that activity and that the integrity of the tax system will not be compromised.”

Despite that, privatizing tax collections was tried with disastrous consequences eight years ago. In that pilot program, revenue collections were far less than projected, even as the effort generated widespread complaints from taxpayers about harassment and abuse at the hands of debt collection companies. The results were so bad that a follow-up program planned for the next year was cancelled.

Apart from harassment of taxpayers and the risk of putting their private tax information in public sector hands, President Kelley pointed to the cost of the proposal, as shown in a report prepared by the IRS itself.

The administration’s tax privatization scheme would, in the best scenario, Kelley said, result in a net return of only $3 for every taxpayer dollar spent. By contrast, the IRS study showed, a modest investment in additional funding for IRS compliance efforts would result in a net return of $31 for every $1 invested—more than 10 times as much as turning the job over to private debt collectors.

“This proposal flies in the face of common sense,” the NTEU leader said. “It would encourage overly aggressive collection tactics, resulting in harassment of taxpayers. It would put private taxpayer information in public hands. And it would return to the U.S. Treasury only a fraction of the money that IRS employees would generate if taxpayer compliance efforts were funded with sufficient resources.”

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