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Washington, D.C.—President Colleen M. Kelley of the National Treasury Employees Union (NTEU) today applauded probing questions by Senate Finance Committee members, and in particular from Sen. Blanche Lambert Lincoln (D-AR), about pending legislation—H.R. 1169—introduced in the House at the request of the administration which would contract out tax collection work.

Kelley said private collections rely on a profit-driven motive that would inevitably lead to “more aggressive collection techniques” even as Congress has cut funding for technology that would prevent a repeat of a previous failed attempt to use private contractors in the collection of taxes.

She made her comments after a Senate Finance Committee confirmation hearing for IRS Commissioner-designate Mark Everson, currently deputy director of the Office of Management and Budget (OMB).

Under the proposed legislation, contractors would be paid up to 25 percent of the taxes they collect, a proposal Kelley called “in direct opposition” to provisions in the 1998 IRS restructuring act that disavowed the use of collection information to evaluate employee success because of the danger it would promote overly-aggressive collection techniques.

While Everson said the work of individual IRS employees would be evaluated using balanced measures, it is much more likely that contractors would be motivated to increase collections in order to increase profits, Kelley said. “Clearly, contractors and their employees will understand that their jobs depend on bringing in revenue,” President Kelley said, “not providing service to taxpayers.”

One point that did not come out at today’s hearing, Kelley said, but that the IRS will acknowledge, is that overdue taxes can be collected with less resources if it is done by IRS employees rather than by private contractors. What’s more, the NTEU leader said, the proposed legislation “makes clear” that contractors will have access to confidential taxpayer information.

If tax collections by private contractors “would not save taxpayers any money and would be much less protective of private taxpayer information,” President Kelley said, why would we change a law that has been on the books for decades that says tax collection is an inherently governmental function that should not be done on a for-profit basis?

But the problems of the legislation extend even further, President Kelley said. The legislation makes it clears that the federal government wouldn’t be liable “for any act or omission of any person performing services under a qualified tax collection contract,” including the unauthorized access or use of taxpayer information, as is the case with IRS employees. Kelley urged Congress to reject the administration proposal.

NTEU is the largest independent federal union, representing some 150,000 federal employees in 29 agencies and departments.