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Washington, D.C.—The leader of the union representing Internal Revenue Service (IRS) employees today took sharp issue with the missed focus of a Treasury Department strategy for reducing the nation’s growing tax gap.

“Treasury refers to its document as a ‘comprehensive strategy,’” said President Colleen M. Kelley of the National Treasury Employees Union (NTEU), “but the report fails to contain one word about the need for rebuilding the dramatically reduced staffing levels at the IRS.”

She added: “Without addressing that critical need, this cannot be called a ‘comprehensive’ plan,” pointing in particular to declines of 40 percent and 30 percent, respectively, in the number of IRS Revenue Officers and Revenue Agents between 1995 and 2003.

Over that span, the Revenue Officer workforce dropped from 8,139 to 5,004, while the number of Revenue Agents declined from 16,078 to 11,515—despite major increases in the workload. These two groups of IRS employees are critical to closing the tax gap, which is the difference between taxes owed and those paid. It currently is estimated by the IRS to be $345 billion, and it is growing.

Ironically, President Kelley said, Treasury issued its report on the same day that IRS Commissioner Mark Everson testified before Congress, as he has done repeatedly, that using IRS employees would be less expensive than the private collection companies the agency has hired to pursue tax debts and that are retaining about 25 percent of taxpayer payments owed to the federal government.

Under the much-criticized IRS tax debt privatization plan, private debt collectors are paid a bounty on the money they collect. Despite the frequent admissions that this is much more costly than having IRS employees perform the work, the IRS is intent not only on continuing the program, but expanding it over the next year or so from three private collectors to as many as 10.

Also on the same day as the Everson testimony, NTEU issued a White Paper dealing with the tax gap, in which President Kelley called the hiring of sufficient IRS staff to meet both its tax law enforcement and customer service responsibilities “the single most important step” that should be taken to close the gap.

The NTEU leader used that document to spotlight the fact that the IRS “has neither sought nor fought for the resources it needs” to address this significant national problem. “If the IRS were serious about reducing the tax gap,” she said, “it would be asking for the personnel to attack it.”

Meanwhile, Kelley criticized another matter raised in the Treasury report, calling its comments on an IRS commitment to customer service “hollow” in light of the IRS’s effort last year to close a significant number of its Taxpayer Assistance Centers (TACs) across the country.

Led by NTEU, that effort generated widespread national and congressional criticism, resulting in a mandate from Congress that the TACs remain open, and generating a report from the Treasury Inspector General for Tax Administration (TIGTA) belittling as inaccurate or nonexistent the ‘scientific models’ the IRS used to determine usage of the centers and which facilities to close. The IRS finally dropped the idea.

“Eventually,” Kelley said, “people at the highest levels of the IRS are going to understand not only that enforcement and customer service play equal roles in the effective collection of taxes, but that cutting back on staff while the workload increases simply isn’t going to get the job done.”

When that happens, she said, “then, and only then, Treasury and the IRS will be in a position to come up with a meaningful comprehensive strategy to address the tax gap.”

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