Rep. Jason Chaffetz, R-Utah, plans to tackle more than $1 billion in unpaid taxes by federal civilian employees with a mix of the sweet and bitter.
The House Oversight and Government Reform Committee chairman’s new bill—HR 396, the Tax Accountability Act—would address delinquent tax bills by contractors by requiring contractors and “individuals applying for federal employment” to certify their tax status when applying for work.
If the contractor or grant applicant has a heavy delinquent tax debt, they wouldn’t be eligible for the contract and could face suspension of debarment.
Chaffetz said in a Jan. 10 statement that the bill addresses a growing fiscal problem within the federal government, citing IRS figures that more than 100,000 federal civilian employees owed more than $1 billion in unpaid income taxes in fiscal 2015.
The Utah congressman also noted starker debts from the contracting community, which he said owed more than $7 billion in back taxes spread across more than 63,000 defense, agency and General Services Administration contractors.
"Federal employees, contractors, and grant recipients are not above the law,” Chaffetz said. “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."
The bill does offer exemptions for federal employees and applicants working to settle their tax debt, providing them 180 days to apply for the exemptions. The bill also includes a hardship exemption for those whose service “is in the best interests of the United States.
HR 396 is the second tax delinquency bill Chaffetz introduced on Jan. 10, following the Members of Congress Tax Accountability Act, which would require congressmen to disclose their delinquent tax liabilities and require an ethics inquiry into those liabilities.
That bill also proposes possible garnishment of congressional wages in light of a delinquent tax record.
Chaffetz has been a frequent critic of federal employees and contractors with delinquent tax records, offering similar legislation in 2013 and 2015. Both bills passed the House, but never made it through the Senate.