Legislation Introduced to Target Tax Delinquent Federal Employees

Legislation has been introduced in the House that would prevent individuals with seriously delinquent tax debt from working for the federal government.

Congressman Jason Chaffetz (R-UT) has introduced legislation that would render individuals with seriously delinquent tax debt ineligible for federal civilian employment, contracts, or grants.

Chaffetz is introducing the Tax Accountability Act (H.R. 396) in response to IRS data which show that 100,000 federal civilian employees owed more than $1 billion in unpaid federal income taxes in FY 2015.

Chaffetz also pointed to a Government Accountability Office (GAO) report which found that approximately 63,800 contractors (27,000 defense contractors, 33,000 civilian agency contractors, and 3,800 General Services Administration contractors) owed more than $7 billion in back taxes.

Chaffetz said in a statement:

Federal employees, contractors, and grant recipients are not above the law. In fact, individuals responsible for federal resources should set the standard for upholding their civic responsibility. Yet, year after year their tax delinquency is resulting in more than $1 billion owed to the federal treasury annually. This legislation ensures that these individuals are satisfying their tax obligations.

One of the key provisions of the bill is that it would require contractors, grant recipients and anybody applying for federal employment to certify their tax status when submitting a proposal or application for contracts and grants, or employment.

However, the bill exempts federal employees or applicants working to settle their tax debt and resolve outstanding liabilities, and provides a financial hardship exemption if the individual’s service is in the best interests of the United States. Federal employees would be provided 180 days to demonstrate that they meet one of the exemptions in the legislation.

Past Legislation

If this legislation sounds familiar, it’s because it has been introduced in the past.

In 2011, Chaffetz introduced legislation to fire current federal employees and prevent hiring new federal workers who have seriously delinquent tax debts. The House passed the legislation in 2012.

That bill ultimately failed to advance beyond the House. However, in 2015, the House put it to another vote but it failed to pass.

Other lawmakers have proposed similar bills as well. In 2013, for example, Senators Tom Coburn, M.D. (R-OK) and Mark Pryor (D-AR) introduced a bill that would have prohibited the federal government from employing federal employees with seriously delinquent tax debts. Coburn also said in 2014 that federal workers who have seriously delinquent tax debt pose a security risk to the United States.

And another bill that was introduced in the Senate in 2015 would have blocked bonuses for tax delinquent federal workers. It was introduced by Senators Richard Burr (R-NC) and Senator Joe Manchin (D-WV).

Both Senate bills ultimately failed to advance.

What About Congress?

A frequent question FedSmith.com users have when bills such as this one are proposed is, “Are Members of Congress included as well?”

Chaffetz hasn’t forgotten about Congress. He also introduced the Members of Congress Tax Accountability Act (H.R. 397) which would “require Members of Congress to disclose delinquent tax liability and to require an ethics inquiry into, and the garnishment of the wages of, a Member with Federal tax liability.”

Chaffetz has introduced a version of this legislation in the past as well.

About the Author

Ian Smith is one of the co-founders of FedSmith.com. He has over 20 years of combined experience in media and government services, having worked at two government contracting firms and an online news and web development company prior to his current role at FedSmith.