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Lawmakers Ask Obama to End IRS Privatization

By Ed O'Keefe

Fourteen members of Congress have written to President-elect Obama asking that his incoming administration end contracts with two private companies that perform tax collection duties for the Internal Revenue Service, an arrangement that has angered Federal workers' unions, customers and others.

As The Washington Post first reported in April, the IRS has used three private companies to collect $1 billion in unpaid taxes. By April the companies had collected only $49 million, little more than half of what the IRS paid to start the program.

A new letter signed by members of the House Ways and Means Committee urges Obama to abandon the program altogether.

"In light of the current economic situation, it is important that the Administration protect taxpayers by ensuring that they deal with the IRS directly to work through any difficulties," the letter states. It does not express any other concerns about the program beyond the nation's current economic situation however.

Reps. Charles B. Rangel (D-N.Y.), John Lewis (D-Ga.) Chris Van Hollen (D-Md.), Pete Stark (D-Calif.), Earl Pomeroy (D-N.D.), Shelley Berkley (D-Nev.), Allyson Y. Schwartz (D-Pa.), Richard E. Neal (D-Mass.), Earl Blumenauer (D-Ore.), Joseph Crowley (D-N.Y.), Kendrick Meek (D-Fla.) and Bill Pascrell (D-N.J.) co-signed the letter to Obama.

Renewing the contracts with private tax collectors is currently under consideration by the IRS. The contract would be renewed in March 2009 for one year.

“This program has been a financial failure and even the IRS acknowledges the work could be done more cost-effectively by IRS employees,” National Treasury Employees Union president Colleen M. Kelley said in a statement. “Renewing the contracts -- much less extending the program -- would just perpetuate the waste, risk and abuse. It is past time to end this program.”

Ending the privatization program tops an NTEU wish-list it hopes the Obama administration will address once it takes over. It also wants the ability to unionize Transportation Security Administration employees and the restoration of a Clinton-era executive order that established labor-management partnerships within the Federal workforce.

By Ed O'Keefe  | December 16, 2008; 6:40 PM ET
Categories:  Agencies and Departments  
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Comments

In effort to help make it easier, I just registered www.AskYourGov.com which I've pointed to your Moderator forum. I just bought it, so it will probably take 24 hours or so to go live. If you want to take the domain reg over so you can own and control it, let me know. Either way, I hope the format gains some traction and you are able to chase down some answers. Cheers, Michael

Posted by: leggett | December 17, 2008 1:09 AM | Report abuse

This is one of those areas where I must side with the union. These are the types of positions that should be civil service. If IRS had hired some feds to do this work, they would have got back more money and paid out less.

Posted by: bigtom6156 | December 17, 2008 9:07 AM | Report abuse

In its initial phases the A76 procedures were to be used for operations which could reasonably be interpreted as not inherently governmental in function. Insofar as Treasury was one of the first agencies to be created dating to 1790 to collect revenue for the infant government. The broader question here is how did this function ever get outsourced in the first place.
A bill in the 110th congress to eliminate outsoucing of this vital function passed the house along largely party lines.
Insofar as there is enough uncollected revenue out there to fund the bridge loan for the automakers the incoming 111th congress must adeqately the IRS collection efforts. Regardless of one's postion on the equity of or efficacy of current tax law the function of the IRS is to collect revenue which is due and payable to the Treasury and in a time which will result in record deficits it is more important than ever to this in an effective and expedtious manner.

Posted by: rant | December 17, 2008 9:34 AM | Report abuse

As part of the "Contract on America", Congress pressured the IRS, over IRS objections, to outsource collection. Since then, Congress has consistently refused to authorize budget for personnel slots at IRS for collection. Now Congress wants to pretend that it's the nasty IRS's fault that they're doing what Congress told them to do. Everyone except Congress has always known that this was a bad idea -- inefficient, prone to abuse, and chock full of moral hazard.

Posted by: DrDaveT | December 17, 2008 9:57 AM | Report abuse

The Congress we have now is not the Congress of the Contract on America. Privatization dilutes accountability, and this is an area in which accountability is everything.

Posted by: lonquest | December 17, 2008 12:01 PM | Report abuse

While I can understand everyone's input given what is stated in the article, I would challenge that there are three sides to every story. The fact that we have the back log that we do in unpaid taxes is ridiculous. The fact that over the years they were unable to collect is absurd. If we were to speak to these companies I wonder what they would have to say? Having seen a report before from others in support of the program I believe this article to only be showing one side, and a skewed one side at that. Before you make any calls or choose sides, please seek out someone who is in support of the program and hear both sides.

Posted by: joyfulennie | December 17, 2008 12:39 PM | Report abuse

As a retired IRS employee, I agree that the job of collecting taxes should be done by the IRS employees and not by contractors. These contractors have not collected enough taxes and have caused the IRS instead. Hopefully Obama will change that policy and get rid of the contractors.

Posted by: lclon | December 17, 2008 9:25 PM | Report abuse

The comments to this entry are closed.

 
 
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