IRS Ends Farming-Out Of Tax Collections; 'Best Done In-House'

COLLEEN M. KELLEY: 'Important vote of confidence.'

The U.S. Internal Revenue Service announced March 6 that it would not renew two contracts with private tax collection firms, effectively ending the current outsourcing of the task.

National Treasury Employees Union President Colleen M. Kelley celebrated the move, as she and other tax advocates had lobbied for total in-house tax collection under the Bush Administration.

Best Done by IRS Employees

"After a thorough review of this program, I have decided not to renew the contracts," IRS Commissioner Douglas Shulman said in a statement. "I believe this work is best done by IRS employees, and I believe we have strong support from the [Obama] Administration and the Congress for increased IRS enforcement resources going forward."

Ms. Kelley had argued before several congressional panels that private collectors had been known to use abusive collection tactics. The NTEU had also questioned outsourcing's efficiency, saying that in-house employees get a 13-to-1 return on investment while private collectors produce a 4-to-1 yield.

In April 2008, U.S. Sen. Byron Dorgan of North Dakota and U.S. Sen. Patty Murray of Washington had urged Mr. Shulman to review and scrap the outsourcing program.

"This result, a long time coming in the face of growing opposition to the program, is not only a good decision by the IRS, it is the right decision," Ms. Kelley said in a statement. "It reaffirms what NTEU has said repeatedly— that given the tools and resources, no one can perform the work of the Federal Government better than Federal employees. This is an important vote of confidence for IRS employees."