IRS hires collection companies, upsets union


April 14, 2006|By MELISSA HARRIS

The Internal Revenue Service has hired private collection agencies to pursue people who have acknowledged debts but not settled their tax bills, beginning this summer.

The government selected three companies last month to begin the first, two-year phase of the program. The federal employees who do this work are angry because their own ranks have been scaled back in recent years as their workload has grown.

These workers also believe that if more people from "middle America" knew that the plan would put debtors' Social Security numbers in the hands of private companies who would take between 21 percent and 24 percent of collections, citizens would be as outraged as the workers are.

The employees' union launched a Web site yesterday,, to reach outside the Beltway and persuade people to join its campaign. Colleen M. Kelley, president of the National Treasury Employees Union, accused the IRS of operating under a "veil of secrecy" for not notifying the public about its plans in recent tax mailings.

The IRS, however, has said taxpayers' privacy will be protected. The companies will not have enforcement powers, such as filing liens or seizing property, as the IRS does. Individual employees' pay will not be tied to collections, and they'll have to follow the same code, meaning no late-night phone calls or front-porch harassment. The IRS sees this as debt recovery plus.

The agency has selected Linebarger Goggan Blair & Sampson LLP of Austin, Texas; CBE Group of Waterloo, Iowa; and Pioneer Credit Recovery of Arcade, N.Y., for the job. The effort had recently stalled after companies who lost bids for the work protested to the Government Accountability Office.

The union also is supporting a bill in the House of Representatives that would stop future outsourcing of tax collection. It has 74 co-sponsors.

FAA dispute

The Federal Aviation Administration has handed over its contract dispute with air traffic controllers to Congress, which has 60 calendar days to intercede or allow the government to execute its offer.

In 1998, the last time the government bargained over pay with the National Air Traffic Controllers Association, the union won a $200 million raise over three years, reductions in the number of supervisors and extra money for controllers at high-traffic, hard-to-staff airports.

FAA Administrator Marion C. Blakey said in an interview yesterday that such generous provisions could not be sustained given the need to finish installation of new runway safety technology. The existing radar system has been known to fail and have limitations during rain, according to the National Transportation Safety Board.

Blakey's proposal saves $1.9 billion over five years, largely by cutting starting salaries by 30 percent.

"We have nine national unions and 43 bargaining units, and many of them are operating without a contract because they've looked at the controllers and said, `We would like a 75 percent raise over the course of our contract, too,'" she said. "No one who comes in front of me is going to get that."

The 1998 negotiations were the first time a nonpostal federal union bargained over pay, a topic that the government has mostly kept off the table after federal workers won collective bargaining rights under President John F. Kennedy. The most well-known example: Members of the air traffic controllers' former union went on strike over pay and working conditions in 1981. President Ronald Reagan fired them and banned them from returning. (President Bill Clinton rescinded the ban.)

Despite a new union, the agency is still dealing with the ramifications of that labor dispute. The FAA is facing a retirement wave like no other agency. Many of the agency's controllers were hired in the three to four years after the 1981 strike, and controllers must retire at 56.

The FAA employs 14,575 controllers but needs to hire about 12,500 workers to fill in for retirees during the next decade. Essentially, the entire work force must be replaced during that period to keep up with increasing air traffic and retirements.

Union leaders are warning of a "staffing crisis," a claim the GAO bolstered in a June 2002 report highlighting safety concerns should hiring not pick up.

Blakey said the agency has a recruitment plan and should her proposal pass Congress, controllers aren't "going to rush for the exits." Pension checks rise with tenure, and her proposal wouldn't cut anyone's salary. Rather, current controllers would see their overall compensation and salaries rise.

Cash compensation averages would grow from $128,500 to $139,900 under the FAA offer. The union was asking for $145,300, an FAA spokesman said.

The union, however, contends that the FAA proposal lowers the tops of salary scales for most current workers -- and any raises above those peaks would be in the form of bonuses, rather than in base-pay growth.

"If they stay with this contract, they're going to lose money in retirement," said Ruth Martin, executive vice president of the controllers' union. "They'd be better off retiring on day one of it."

She said the union is optimistic that the Republican-led Congress will get the FAA back to the bargaining table.

"We believe Congress wants a fair and voluntary agreement, and doesn't want to get involved in a union dispute," Martin said.

The writer welcomes your comments and story ideas. She can be reached at or 410-715-2885. Recent back issues can be read at

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