Home Media Center News Releases

Washington, D.C.—In a recent poll with over 2,000 respondents, more than three out of four among them expressed opposition to the possibility of the Internal Revenue Service (IRS) using private collection agencies to collect back taxes.

Seventy-six percent of respondents objected to the proposal, with 49 percent of those taking part in the Internet Broadcasting Systems poll saying such a step by the IRS would open up the door to taxpayer abuse; and another 27 percent saying such a plan currently under consideration in Congress should be scrapped because the private collectors would be paid too much on a commission basis.

“Clearly, the public is concerned—as it should be—about turning their private tax information over to private collection agencies,” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU), which is strongly opposed to involving private companies in tax collection activities.

The poll results support NTEU’s long-standing and vigorous opposition to an administration proposal under which the IRS would use private collection agencies to pursue tax debts in exchange for a commission of up to 25 percent of the amounts they collect. NTEU emphasized its opposition to the proposal in a full-page ad in today’s edition of Roll Call, a Capitol Hill newspaper specializing in legislative matters.

NTEU has been highlighting not only the potential for taxpayer abuse but the economic inefficiency of the privatization proposal.

President Kelley pointed to a failed pilot program of private tax collections in 1996, during which private contractors failed to follow the requirements of the Fair Debt Collection Practices Act.

The proposed program would encourage private companies to use aggressive debt collection practices, since their compensation would depend on the amount of taxes collected. “Debt collection companies already make up the most complained-about industry in America,” President Kelley said, noting that in 2002 alone, they accounted for more than 25,000 consumer complaints to the Federal Trade Commission.

What’s more, she said, the 1996 pilot program showed significant failures of debt collectors to protect confidential and private taxpayer information. “There is no reason to believe that the IRS will have any better control now over how taxpayer information is used once it is released to debt collectors,” Kelley said.

Noting the poll figures showing concern about how much the program would cost in private hands, President Kelley said that IRS employees could collect ten times as much as private agencies--$30 for every dollar invested with federal employees, compared to $3 for every dollar spent with private collection agencies.

NTEU is the largest independent federal union, representing some 150,000 employees in 29 agencies and departments, including more than 97,000 in the IRS.