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NTEU, Van Hollen Criticize Plans to Privatize Debt Collection

DEC. 6, 2004

NTEU, Van Hollen Criticize Plans to Privatize Debt Collection

DATED DEC. 6, 2004
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December 6, 2004

 

Van Hollen Criticism of Congressional 'Double-Speak'

 

On Tax Debt Privatization Draws NTEU Support

 

 

Washington, D.C. -- With the House poised to repeal legislation tonight that would have expanded congressional access to tax returns, the leader of the National Treasury Employees Union (NTEU) applauded a call by Rep. Chris Van Hollen (D-MD) for the administration to scrap a separate, risky plan to turn sensitive taxpayer information over to private sector debt collection agencies.

"Rep. Van Hollen is right on the mark" in describing as 'a risky scheme' an Internal Revenue Service (IRS) plan to turn over as many as 2.6 million tax returns to private sector companies, said NTEU President Colleen M. Kelley, who has been leading the fight against administration efforts to privatize federal work, including tax collection.

Van Hollen, who called on the IRS to find "a more effective means" of collecting tax debts, made his statement as the House planned action later tonight, during a second lame duck session, to repeal a provision in the 2005 Omnibus Appropriations bill, which would expand the number of members of Congress and their staffs who would have access to tax returns.

That provision, approved in the first post-election lame duck session last month, has generated a great deal of opposition. The Senate earlier approved a resolution striking the language from the omnibus bill. While strongly supporting repeal, Van Hollen criticized Congress for "speaking out of both sides of its mouth" on this issue, since it struck from the omnibus a House-approved amendment he supported and which was introduced by Rep. Shelley Moore Capito (R-WV) that would have prevented the IRS from using any funds to hire private debt collectors. He called that "a similar mistake" to the "clearly bad idea" that would broaden congressional access to private tax returns.

Under the congressional approval the IRS won earlier this year, it would be permitted to hire private sector debt collectors and pay them a bounty of up to 25 percent of the money they collect. Critics of the plan, led by NTEU, include a broad coalition of consumer and public interest groups that have argued that the risks to taxpayer privacy are too great to proceed with the program.

That view is continuing to gather public support. Most recently, a University of Cincinnati law professor, quoted in the ABA Journal of the American Bar Association (Vol. 90, Dec. 2004, by David L. Hudson Jr., reprinted by permission), said he not only believes proponents of the privatization plan overstate the amount of revenue to be collected by the private firms, but that the risks outweigh any possible benefits.

"More fundamentally," said law professor Paul L. Caron, "I think private collection threatens taxpayer privacy and opens up the collection process to abuse by overzealous private contractors."

He added: "If private debt collectors are paid purely on the basis of a percentage of the taxes they collect, this will encourage strong-arming taxpayers. I would rather improve any deficiencies in the IRS collections process and let them collect the taxes as they have done for over 90 years."

NTEU is the largest independent federal union, representing some 150,000 employees in 30 agencies and departments, including some 98,000 in the IRS.

 

For more information, visit the NTEU web site at

 

www.nteu.org
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