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Washington, D.C.—The leader of the union representing tens of thousands of Internal Revenue Service (IRS) employees described today as a “a sad day for America’s taxpayers,” in that “American taxpayers can no longer have the confidence that federal tax collections are not based on personal gain.”

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) made that assessment in the wake of the IRS announcement that it has awarded contracts to three private debt collection companies to pursue tax debts in exchange for a bounty of up to 25 percent based on the money they collect.

“These three contracts are only the tip of the iceberg that is bearing down on an unsuspecting public,” President Kelley said, noting that 33 private debt collection companies vied for the initial contracts from the IRS, and that the IRS plans to award as many as 10 contracts later this year.

“Taxpayers deserve much better than this program,” Kelley said. “Their personal, sensitive and private information should not be divulged by our government.” Unless this unwise program is stopped, the NTEU leader warned—and H.R. 1621, bipartisan legislation in the House, would do just that— “the floodgates will be open, and taxpayer information will be up for grabs.”

NTEU has been leading the fight against the tax debt privatization program, arguing it puts Social Security numbers and private financial information in the hands of the industry that annually draws the most consumer complaints in the nation. It generated more than 58,000 such complaints to the Federal Trade Commission (FTC) last year alone—fully 17 percent of all consumer complaints to the FTC in 2005.

Moreover, Kelley said, the tax debt privatization program is a bad economic deal for all Americans.

A recent private study showed that the IRS operates one of the most cost-efficient tax collection systems in the country, while the IRS tax debt privatization plan will generate payments up to $25 for the private debt companies to collect $100.

The ‘so-called’ safeguards put in place by the IRS are inadequate to protect taxpayer privacy, the NTEU leader said. “Americans believe certain governmental functions should not be farmed out to for-profit companies and this is clearly one,” she said.

Kelley took both the IRS and the administration to task for its failure to inform the public about the looming impact on them of this program. “By the time most people find out about what’s happening, it will be too late” to prevent the spread of their personal information—it will already be in the hands of debt collectors, she said. “The farther this program moves ahead, the more shocked people there will be across this country,” she warned.

NTEU is the largest independent federal union, representing some 150,000 employees in 30 agencies and departments, including 90,000 in the IRS.