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Washington, D.C.—As the Internal Revenue Service continues moving forward with its plan to award contracts to private debt collection agencies to pursue tax debts, a media report of outrageous and illegal behavior by such companies underscores the folly of the plan, the head of the union representing tens of thousands of IRS employees said today.

President Colleen M. Kelley of the National Treasury Employees Union (NTEU) has been leading the fight against the IRS plan to hire private sector debt collectors to seek payment of tax debts owed.

Kelley repeatedly has warned of the likelihood that the IRS plan, which will pay the companies up to 25 percent of what they collect, will lead to abuse of taxpayers by debt collectors and put at serious risk personal and sensitive taxpayer information—including their Social Security numbers.

The NTEU leader called on Congress to approve pending bipartisan legislation, introduced by Reps. Chris Van Hollen (D-MD) and Rob Simmons (R-CT), that would revoke the authority of the IRS to privatize tax collection.

A media report today highlights the dangers in using private debt collectors. The newspaper article describes outrageous and abusive tactics employed by such companies in the course of their business, and reports that over the past five years, consumer complaints to the Federal Trade Commission about collection agencies have climbed sharply to more than 58,000 from fewer than 19,000 in the year 2000. According to FTC figures, the debt collection industry annually ranks as the most complained-about in the country.

Nearly a decade ago, in 1996, the IRS pursued a pilot program of tax debt privatization, but it flopped miserably. Collections were far less than anticipated, and the program resulted in serious abuse of taxpayers, including multiple violations by the private debt collectors of the Fair Debt Collection Practices Act.

Along with the Van Hollen-Simmons bill, Kelley said there is growing bipartisan understanding in Congress of the dangers to taxpayer privacy inherent in the use of private companies to collect taxes. “Increasingly, members of Congress are speaking out about the inherently-governmental nature of collecting taxes, and expressing their concerns about the clear risks to the privacy of their constituents,” the union leader said.

NTEU has pushed for increased resources for the IRS, emphasizing that an internal agency study showed that with only a modest boost in enforcement funding, IRS employees could return 10 times as much revenue to the treasury as is anticipated to be generated by the privatization effort.

NTEU is the largest independent federal union, representing some 150,000 employees in 30 agencies and departments, including more than 94,000 in the IRS.