Union Sues IRS to Provide Information on Private Collection Program

The National Treasury Employees Union (NTEU) has filed suit against the Internal Revenue Service (IRS) under the Freedom of Information Act (FOIA) to compel the release of documents related to IRS’s controversial and widely-criticized program which employs private collection agencies to collect unpaid tax debts.

“Seven months ago,” said NTEU President Colleen M. Kelley, “NTEU filed an appropriate FOIA request for information on the companies bidding for the work, on the contracts that were awarded and on the protests filed by losing bidders. To date, the IRS has yet to even respond.”

Under FOIA, the IRS must either respond within 10 working days or use that time to request an extension—the IRS has done neither. FOIA does contain specific exemptions to prevent the release of some kinds of information, but the IRS documents requested by NTEU are not exempt from disclosure either under FOIA or other federal laws.

“The IRS’s behavior certainly raises questions about the causes of its reluctance to provide this information to taxpayers and its own employees,” Kelley said, noting the critical importance of “open and transparent operations” by the IRS to the success of the nation’s voluntary tax system.

A lack of transparency at the IRS was also noted by National Taxpayer Advocate Nina Olson in her call earlier this month for Congress to repeal the authority of the agency to hire private sector debt collectors. The IRS “surrender[s] an important part of the public’s trust,” Olson said, by keeping important information about the initiative cloaked in secrecy.

The tax debt privatization program is underway, with thousands of taxpayer records having been turned over to three private debt collectors already despite growing opposition to the program among members of Congress and others.

The NTEU suit, filed in U.S. District Court for the District of Columbia, argues that the IRS “has no legal authority” to withhold the requested information from NTEU.

NTEU is asking the court to declare unlawful the IRS refusal to release the records to the union, and to order the agency to do so.