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Washington, D.C.—A House-Senate Conference Committee “has acted in a truly unfortunate manner” by ignoring strong bipartisan efforts in Congress that would have stopped personal and sensitive taxpayer information from falling into the hands of private companies, the leader of the nation’s largest independent union of federal employees said today.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) called the committee’s action in stripping the taxpayer protections from the 2005 Omnibus Appropriations bill “a step backward for consumer privacy” as well as a waste of taxpayer money. The omnibus funding bill was approved by Congress on Saturday.

She promised that the union will monitor implementation of an Internal Revenue Service effort to use private debt collection agencies, which will be paid a commission based on the amount of tax debt they collect, and added that NTEU will continue to educate the public about the risks of such a program to their sensitive and personal tax information.

At issue was language in the 2005 Transportation-Treasury funding bill, advanced by Rep. Shelley Moore Capito (R-WV), that would have prevented the IRS from using any funds to contract with private debt collectors to collect tax debts.

At the time she offered the amendment to the pending legislation, Rep. Capito warned that the privacy issues and potential for harm inherent in the use of private tax collectors “should be cause for

alarm.”

Prior to the November election recess, Congress had approved, in an unrelated tax bill, a provision permitting the IRS to enter into such contracts. That approval came despite the demonstrated inability of the IRS to monitor and manage its private contractors on a variety of issues—and despite the history of a failed attempt at tax debt privatizing eight years ago.

A 1996 pilot program produced such poor results—including far lower than expected collections, along with abuse of taxpayers by private debt collectors—that a planned 1997 program was cancelled by the agency.

The pilot program resulted in instances of the worst practices of the debt collection industry and violations of the Fair Debt Collection Practices Act, including dunning phone calls to taxpayers as early as 4:19 a.m. NTEU has “no reason to believe” that this program will fare any better, Kelley said.

The committee’s action also ignores the concerns of consumers who continually flood the Federal Trade Commission with complaints about the aggressive nature of debt collectors. That industry has earned, for the third year in a row, the dubious distinction of being the most complained about industry in America.

NTEU has been leading the fight against tax debt privatization, emphasizing the dangers of private taxpayer information getting into the hands of private sector companies, particularly at a time when identity theft is a real and growing problem.

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