twocol

Site Menu:

2010 Pay Raise: 2.1 Percent for Chapter 47 Members

Taxpayer Advocate: IRS Outperforms Private Tax Collectors

Washington, D.C.—Nationwide the federal workforce received a 2.0 percent increase in pay rates for 2010; in New York pay rates rose 2.1 percent. This differential was due to the allocation of 1.5 percent across the board raise and an average 0.5 percent locality pay increase. The inclusion of the locality pay differential was contrary to President Obama's proposal which did not include any locality pay increase. NTEU engaged in a lengthy and successful effort convincing Congress to include the locality pay allocation, and with the assistance of House Majority Leader Steny Hoyer (D-MD) a portion of the raise was allocated to locality pay.

NTEU President Colleen M. Kelley said "Under the administrations's alternative pay plan, there would not have been any locality based adjustment for the first time since that system began operation in 1994." President Kelley in particular thanked Rep. Hoyer and stated "...he is well aware of the gap that exists between public and private sector pay and the impact that has on the ability to hire and keep the quality people they need. The Federal Salary Council has put the current gap at about 26 percent, on average.

While pleased with congressional efforts to retain locality pay, President Kelley again expressed her disappointment that the adminstration did not continue parity in pay raises for federal civilian employees and members of the military in 2010. President Kelley has stated that she will continue to push for the inclusion of pay parity for next year.

Using Internal Revenue Service (IRS) data comparing private tax collection firms the IRS hired to collect taxes with IRS employees, the National Taxpayer Advocate Nina Olson concluded that the IRS is "far superior" in collecting revenue and resolving cases sooner, preventing increased interest payments and penalties to taxpayers. NTEU President Colleen Kelley referred to the study and Olsons analysis stating, "It is a faulty assumption that privat industry always knows better. The IRS is now assisting the PCAs on improving their own collection practices and paying for the privilege."

Since its inception, the IRS has spent approximately $80 million to set up and administer the privatized tax collection program but the program only produced about $60 million in revenue. The private tax collection firms were paid almost $13 million in commissions. Private tax collection firms are paid up to 25 percent on the revenue collected.

IRS Congressional testimony stated that the projected revenue for the private tax collection program was $65 million in 2007 and up to $127 million in 2008. Clearly, the data shows that IRS tax collection is superior to PCAs. Olson observed, that keeping tax collection inside the IRS benefits the IRS and taxpayers alike.

TIGTA (Treasury Inspector General for Tax Administration) also reported serious problems with IRS use of private tax collectors. The report noted continuing taxpayer discomfort over sharing confidential information with private debt collectors. NTEU has voiced concern over taxpayer privacy and taxpayer rights since privatization was first proposed.


Home \| Contact and Feedback	NTEU Chapter 47 © 2006