CAN TENS of billions in unpaid federal taxes and other government debts be brought into the Treasury through the assistance of private consumer reporting agencies? Absolutely, say Sen. Charles Percy and the 43 Senate co-sponsors of the Debt Collection Act of 1981, which creates an unprecedented measure of cooperation between the Internal Revenue Service and private collection agencies and credit bureaus (a similar measure has already passed the House). This public-private experiment in pursuit of tax dodgers and other federal debtors, as even its supports concede, runs a serious risk of invading the personal privacy for millions of innocent Americans. For that reason alone, the IRS -- though generally supporting the proposal at a Senate Finance subcommittee hearing last week -- took pains to note the existing legal constraints upon unauthorized use of IRS data by private agencies and to indicate its uneasiness over the public's eventual perception of this dramatic departure in tax collection procedures.

The problem has staggering dimensions; in fiscal 1979, over $16 billion in unpaid taxes and another $9 billion in overdue loans or other debts to the federal government -- half of which was due for repayment -- went uncollected. The delinquency rate in five of the 10 leading federal lending agencies, according to Sen. Percy, ranged from about 60 percent to an astonishing 97 percent.

What can be done? The Percy measure proposes a dozen "reforms." Many of these make sense. Federal agencies would be allowed to screen applicants for credit against lists of delinquent taxpayers provided by IRS on the realistic theory that only those who pay their taxes should enjoy the benefit of government credit (no disclosure could be made, however, if a dispute continued between the IRS and the taxpayer over the delinquent taxes). The bill would raise the rate of interest on overdue taxes to 100 percent of prime and private for annual adjustments, in order to keep penalties apace with moneymarket fluctuations. Civil liberties groups have criticized yet another provision, which would require applicants for government credit to provide Social Security numbers to be checked against delinquent debtor files (something now barred by interpretations of the Privacy Act). On balance, this stipulation -- required as a matter of course now by private lending institutions -- seems a reasonable accommodation to the problems confronted by debt colloctors in the federal labyrinth.

But the Percy bill would authorize one crucial -- and questionable -- practice: allowing federal agenciesk to release to private collection and credit reporting bureaus, for purposes of collecting from delinquent debtors, a person's "name, address, Social Security number, and other information necessary to establish the [debtor's] identity." As matters stand, the 1976 Tax Reform Act allows only other federal agencies to obtain debtor addresses from the IRS (648,000 debtors were found by this means in 1980 alone). Farming out to private companies the collection of unpaid federal taxes, however, cannot be justified easily to any American familiar with the endless horror stories of collection and credit bureau inaccuracies, discourtesies and grotesque invasions of privacy. Although Sen. Percy, IRS officials and others who support the legislation remain alert to the problems posed by unauthorized "redisclosure" of the IRS data by such private agencies for the purpose of collecting non -governmental debts or establishing credit ratings, we have no confidence that the Senate bill -- or the House bill, which allows the transfer of IRS data to private consumer reporting agencies -- has provided the best approach to the problem.

Some version of the Debt Collection Act of 1981 seems headed for passage, if only because of taxpayer pressures to force the recalcitrant two million debtors to cough up. Would it not make more sense, however, to increase substantially the already-large number of IRS agents engaged in debt collection rather than unlocking confidential taxpayer data to private sector security, especially when controls over potential abuse may prove grossly inadequate? A century ago, it took a House investigation to force an end to the "Sanborn contracts" scandal, in which unwise legislation allowed one politically connected spoilsman to obtain a monopoly on the collection of overdue federal taxes and debts -- for a 50 percent commission. With the best of intentions, Congress seems on the verge of sanctioning a comparable process, whose mischievous consequences in abusing public faith in the tax system may be exceeded only by what the ACLU terms correctly "a 'windfall porfit' for the consumer reporting industry." Strengthening the IRS is one thing, but setting the stage for a flood of corporate "Sanborn contracts" in the 1980s is another and more dubious approach.