Great news reported today by Joe Davidson at the Washington Post (Joe has taken over the Federal Diary column from Stephen Barr, who retired earlier this year). Davidson reports that the Internal Revenue Service (IRS) has decided to discontinue contracting out the management of tax return files at seven regional IRS centers. More details from the Federal Diary column: For most of the past two years, that work has been done by IAP Worldwide Services. The switch takes effect Oct. 1. In the coming months, the IRS says, it plans to hire 700 employees at processing centers in Andover, Mass.; Atlanta; Austin; Covington, Ky.; Fresno, Calif.; Kansas City, Mo.; and Ogden, Utah. This is a great development, although I'm not sure this contract was as controversial as others the IRS has conducted. Colleen Kelley, president of the National Treasury Employees Union did say its members complained about not being able to get information and files they needed in a timely manner and also that the Office of Management and Budget often overstated potential savings from the contract. NTEU has been skepitcal of this contract from the beginning and has cited multiple delays and problems with IAP over the last few years (see this NTEU timeline of problems with the IAP contract). What is clear is that IAP Worldwide Services no longer wanted to provide these services and the IRS rightly decided this was a task better handled by government employees. Let's hope the trend continues at the IRS and they cancel other wasteful, inefficient, dangerous contracts like the private tax collection program.