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Washington, D.C.—The greatest impediment to a higher performing Internal Revenue Service workforce is the agency’s sharply increased movement toward having government contractors perform its important work, including tax collection, the leader of the union representing IRS employees told the public-private IRS Oversight Board today.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) urged the Oversight Board to “take a strong stand against privatizing inherently governmental tax collection functions.” The Board was created by the 1998 IRS Restructuring Act and has considerable influence in a number of key areas, including the agency’s strategic planning, budgeting and more.

President Kelley’s testimony before the Board addressed a number of matters affecting the agency’s performance, including inadequate funding and continuing problems with its massive reorganization, but she focused largely on the issue of contracting out. The NTEU leader has been in the forefront of the effort to curb the administration’s drive to contract to the private sector hundreds of thousands of federal jobs.

Kelley was particularly critical of the IRS, working with private contractors at the direction of the Office of Management and Budget (OMB), to develop a plan to privatize tax collection services. “Most in the IRS

recognize that a pilot project to privatize tax collection several years ago was a costly disaster for the American taxpayers,” she said. “The Bush administration would like to see the day when unaccountable private companies perform tax collection functions on commission at the IRS.”

The NTEU leader pointed to Accenture, a contractor now performing a variety of services for the IRS, which has incorporated in Bermuda to avoid paying taxes in the U.S. “Isn’t it ironic,” she said, “that a contractor that avoids paying taxes is collecting yours?”

Moreover, Kelley called tax collections “just the tip of the iceberg” of privatization going on the IRS, noting several more examples, including a newly-proposed initiative that would route taxpayer calls intended to reach the IRS on to a private contractor without notifying the taxpayer.

“If that contractor gives out the wrong information, it is too bad for the taxpayer, but it is fine for the contractor since they will still collect their contract payment,” she said. Under that proposal, Kelley added, “it is still going to be the IRS that is held accountable for the mistake, and the public perception of the IRS workforce will only decline, even though it was a contactor who gave bad advice.”

NTEU is the largest independent federal union, representing more than 150,000 employees in 28 agencies and departments.