NTEU: Using IRS employees, not outsourcing for debt collection ‘smart and humane’

The National Treasury Employees Union wants the Internal Revenue Service to retrain thousands of employees facing pink slips for outsourced tax-collection work.

NTEU President Tony Reardon said his organization will push Congress for resources IRS needs to teach more than 7,000 employees how to track down late accounts.

“Many of these workers have been loyal employees of the IRS for decades but only some of them will get other jobs within the agency. The smart and humane thing to do would be to retrain the remaining workers to collect delinquent taxes rather than outsourcing IRS jobs,” Reardon said. “There’s absolutely no need for Congress to outsource this important work to the most complained about industry in America when there’s more than enough in-house talent available.”

A provision within a highway bill passed last year requires the IRS to pass on certain delinquent accounts to private collection agencies (PCAs).

Advertisement

The employees who face layoffs work at one of three paper tax return processing sites in Covington, Kentucky; Fresno, California; and Austin, Texas.

Their jobs would be phased out between 2019 and 2024.

IRS in September announced the four contracted PCAs. They are:

  • CBE Group — Cedar Falls, Iowa
  • Conserve — Fairport, New York
  • Performant — Livermore, California
  • Pioneer — Horseheads, New York

The accounts taken up by PCAs are chosen through several criteria including age and lack of resources preventing the agency from following up on the tax debt, IRS said.

The IRS will send written notice to each taxpayer and their representative that their account is being transferred to a PCA. The PCA will send a second letter confirming the transfer.

“Private collection agencies will be able to identify themselves as contractors of the IRS collecting taxes. Employees of these collection agencies must follow the provisions of the Fair Debt Collection Practices Act and must be courteous and respect taxpayer rights,” the IRS said in a September statement. “The IRS will do everything it can to help taxpayers avoid confusion and understand their rights and tax responsibilities, particularly in light of continual phone scams where callers impersonate IRS agents and request immediate payment.”

‘Unable to pay’

In its fiscal 2017 objectives report to Congress, the Taxpayer Advocate Service warned that the private debt collection program “includes practices that will harm taxpayers and tax administration.”

The program was discontinued in 2009 after TAS warned the program threatened taxpayer rights and raised doubts about its revenue projections.

One of the concerns with the new law is that it does not take into account economic hardship, nor does it grant PCAs the power to work out a compromise with taxpayers based on their status .

“PCAs may end up pursuing taxpayers in financial hardship for tax debts the IRS itself could not collect,” TAS said in its report.

The Taxpayer Advocate Service also warned that the IRS’ guidance and training for its PCA program is insufficient.

The current policy does not require PCAs to return a taxpayer account to the IRS if a financial hardship prevents them from paying their debt.

“A PCA may continue to extract payments from a taxpayer who is in economic hardship rather than return the account to the IRS, where it can be designated as CNC [Currently not Collectible] hardship. Thus, although an account designated as CNC hardship would not be assigned to PCAs, once an account is assigned, there is no mechanism to ensure it will be properly managed to reflect a change in the taxpayer’s circumstances,” TAS said in its report. “Thus, similarly-situated taxpayers may be treated differently depending on when their economic hardship arises.”

The PCA guide does not specify what a contractor should consider a reason for labeling an account “unable to pay.”

The current private collection program also lacks a “Referral Unit,” TAS said, which is a group of employees who handle cases returned to the IRS by the private collectors.

“In the absence of a Referral Unit, accounts the PCAs return to the IRS will not be placed in active inventory,” TAS reported, adding that when the unit existed, IRS employees collected 9.2 percent of dollars available for collection versus the 5.4 percent of dollars available collected by PCAs.

TAS also reported that the IRS did not intend on training PCA employees on the IRS audit and collection procedures nor on IRS appeals.

‘Insult to injury’

About 1,800 employees work at the Convington site, while 3,000 and 2,400 work at the Fresno and Austin locations, respectively, and the phase-out of the jobs is just one thing that worries Rep. Thomas Massie (R-Ky.).

During a House Committee on Oversight and Government Reform hearing on federal vacant properties, Massie called the news of moving 2,000 jobs out of the city “devastating.”

“I have this dread I’m going to be here in three years … for instance if the IRS doesn’t find another use for the facility, my concern is we would add insult to injury,” Massie said. “This sprawling, single-story structure that’s right in the middle of our downtown in some of the most valuable real estate, might get tied up indefinitely.”

Massie said he hoped a new use is found for the building, which takes up two city blocks.

“We’d love for the IRS to stay, we’d love for them to find some other use for that building,” Massie said, adding that his “foreboding sense” is that in 20 years he’ll still be on the committee, asking witnesses “why this single story building’s got vines on it.”

Copyright © 2019 Federal News Network. All rights reserved. This website is not intended for users located within the European Economic Area.