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Fire them? Federal employees, retirees owe $3.4 billion in taxes

January 26, 2012 | 12:31 pm

Newtax

A recent IRS report showing that current and retired federal employees owe more than $3.4 billion in income taxes is fueling a drive on Capitol Hill to fire -- and prohibit the hiring of -- tax delinquents on Uncle Sam's payroll.

The report shows that about 98,000 federal civilian workers and postal employees -- or roughly 3% of the federal civilian and Postal Service workforce -- owed about $1 billion to Uncle Sam in 2010, including 684 congressional staffers who owed more than $10 million.

While the total number of delinquent federal employees has dropped, the $1 billion in tax debt for current civilian workers has increased from about $600 million in 2004. When retirees and military personnel are included, nearly 280,000 people owed $3.4 billion, according to the data.

"If you work for the federal government and you don't pay your taxes, you should be fired," said Rep. Jason Chaffetz (R-Utah), who has sponsored the Federal Employee Tax Accountability Act.

The measure, which cleared a committee last year and awaits a House vote, would make anyone "seriously delinquent" -- that is, with a debt for which a notice of lien has been filed in public records --  ineligible for federal work. It would exempt active military personnel and federal workers who enter installment arrangements to pay off their tax debts. A similar bill has been introduced in the Senate by Sen. Tom Coburn (R-Okla.).

During a hearing last year, Rep. Elijah Cummings of Maryland, the top Democrat on the House Oversight and Government Reform Committee, said that the tax compliance rate in the federal community is much higher than in the general public.

The IRS was owed more than $114 billion by all individual taxpayers as of last Sept. 30, according to the agency.

Critics of the legislation have said that firing employees who owe taxes would make it more difficult to collect the money. The unemployed hardly make for very good taxpayers,'' the Federal Managers Assn. said in a letter to lawmakers last year.

Rep. Gerald Connolly (D-Va.), whose district includes many federal workers, complained during the hearing that the bill sought to make public employees, the overwhelmingly majority of whom pay their taxes, a "punching bag."

Perhaps, he said, the bill should to apply to members of Congress. "Any member of Congress delinquent in his or her taxes is automatically suspended from Congress," he suggested. "That would be as much due process as we’re giving federal employees."

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Photo: Federal tax forms. Credit: Jacquelyn Martin / Associated Press

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