Union threatens to block IRS test to scan tax-return forms

In a new battle over outsourcing the head of the National Treasury Employees Union said last week that employees may try to block a plan by the Internal Revenue Service to test outsourcing the digital transfer of information from paper tax returns.

Robert Tobias NTEU president said the IRS cannot legally allow vendors to process tax returns and the NTEU may sue the agency or seek congressional action if officials pursue that approach.

Another option for employees Tobias said would be to tryto compete for the work themselves.The union has objected to a proposal that would allow the vendor the IRS hires to oversee its new modernization program to suggest ways the agency could better manage paper returns.

In a recent request for comments from industry on its upcoming IRS Prime procurement the agency said it would let the winning vendor decide whether this pilot would employ current employees or a private contractor.

A July 7 letter from Tobias to IRS chief information officer Arthur Gross noted the work is an "inherently governmental function" that cannot be outsourced. Even if the IRS can prove otherwise it would be difficult for employees to compete fairly with the private sector to perform the pilot themselves.

While the pilot would involve no more than 10 million of the 315 million pieces of paper the IRS receives annually it is being viewed by vendors as a test of the federal government's commitment to outsourcing data processing work.

"We have been advocating that agencies use pilots to test innovative procurement methods " said Olga Grkavac senior vice president with the Information Technology Association of America Systems Integration Division. "If the results are favorable other agencies would have a track record [to follow]."

Earlier this year the IRS published a feasibility study on outsourcing tax returns processing and concluded it would probably not have enough money to purchase the systems it would need such as high-volume scanners to keep the work in-house. The report also said that officials are finding it increasingly difficult to attract enough qualified employees for its seasonal data-entry work.

IRS officials did not respond to requests for comments last week. Tobias said the agency is "seriously considering the issues that we raised " and the union would wait until the IRS makes a decision before determining what it will do next.

Bert Concklin executive director of the Professional Services Council a trade association that advocates outsourcing said the union's arguments were "nonsensical and totally bogus." He said returns processing tasks were routine and not sensitive enough to be limited to federal employees.

The union wants the IRS to require the future prime contractor to operate an in-house pilot on the grounds that the work is too sensitive to contract out. In the letter to Gross Tobias argued that the Office of Management and Budget's Circular A-76 specifically exempts tax collection from outsourcing.

In an interview Tobias said that even if the IRS can prove otherwise "A-76 requires a competing internal bid be developed." He added that doing so would delay award of IRS Prime because the agency would have a hard time finding an information technology vendor who was not competing for that contract to support the in-house bid. Furthermore he said if the IRS were to choose a pilot that involved contracting out employees' resentment about this decision would inhibit their cooperation with the IRS Prime vendor on other tasks.

"I'll guarantee you there would be qualified people responding to that " Concklin said. "No legitimate opportunity will go unattended."

IRS currently employs more than 29 000 workers in its 10 service centers to open envelopes run scanners and perform manual data entry. But Tobias said "this isn't about jobs this is about federal employees being allowed to do the work they are doing and they can do better if given the proper opportunity to do it."


  • Comment
    customer experience (garagestock/Shutterstock.com)

    Leveraging the TMF to improve customer experience

    Focusing on customer experience as part of the Technology Modernization Fund investment strategy will enable agencies to improve service and build trust in government.

  • FCW Perspectives
    zero trust network

    Why zero trust is having a moment

    Improved technologies and growing threats have agencies actively pursuing dynamic and context-driven security.

Stay Connected