Paul L. Caron

Friday, January 19, 2007

Federal Employees Owe $2.8 Billion in Income Tax

According to press reports, more than 450,000 active and retired federal employees owe $2.8 billion in federal income taxes.  WTOP Radio created this Excel Spreadsheet from data obtained through FOIA requests.

In absolute terms, the departments and administrative agencies with the most tax scofflaws among active employees are:

  1. Post Office: 56,652
  2. National Guard:  44,492
  3. Active Duty Military:  39,366
  4. Veterans Affairs:  17,976
  5. Army:  17,535
  6. Navy:  11,746
  7. Air Force:  10,754
  8. Homeland Security:  9,818
  9. Agriculture:  4,345
  10. Health & Human Services:  4,136

In percentage terms, the departments and administrative agencies with the most tax scofflaws among active employees are:

  1. U.S. Commission on Civil Rights:  9.43%
  2. Government Printing Office:  7.41%
  3. Smithsonian Institution:  5.56%
  4. Court Services:  5.45%
  5. Selective Service:  5.42%
  6. Defense:  5.37%
  7. Pension Benefit Guaranty Corp.:  5.33%
  8. Equal Opportunity Commissioner:  5.25%
  9. Federal Labor Relations Authority:  5.06%
  10. National Endowment for the Humanities:  4.95%

In percentage terms, the departments and agencies with the least tax scofflaws among active employees are:

  1. International Boundary and Water Commission:  0.90%
  2. Treasury Department:  1.30%
  3. National Endowment for the Arts:  1.76%
  4. National Credit Union Administration:  1.78%
  5. Office of Special Counsel:  1.79%
  6. Department of Justice:  1.91%
  7. U.S. Nuclear Regulatory Commission:  1.91%
  8. NASA:  2.16%
  9. Tennessee Valley Authority:  2.23%
  10. Presidio Trust:  2.36%

Other notable departments and agencies have these percentages of employees who are tax scofflaws:

  • House of Representatives:  4.81%
  • SEC:  3.05%
  • Senate:  3.76%
  • Tax Court:  4.85%
  • White House:  2.95%

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» INGRATES from Roth & Company, P.C.
The TaxProf highlights a story showing that many federal employees are happy to take it, but they'd rather not dish... [Read More]

Tracked on Jan 19, 2007 6:32:39 AM

» Government Tax Scofflaws: from The Volokh Conspiracy
Federal employees apparently owe some $2.8 billion in federal income taxes. Paul Caron at TaxProf reports that, measured in terms of the percenta... [Read More]

Tracked on Jan 19, 2007 8:17:37 AM


Go to the website and watch the film, "Freedom to Fascism" by Aaron Russo. Tax on the payment for our labor is unconstitutional and illegal.

Posted by: oldtimer | Jan 19, 2007 9:03:41 PM

Tax scofflaws, heros all. You would all do well to follow thier example.

Posted by: Joel Mackey | Jan 19, 2007 6:45:24 PM

These are the ONLY folks in America who ARE required to pay income taxes. Government employees have no leg to stand on when it comes to paying homage to their "god government."

Get every dime from them, Feds. Take everything they have. When they are unable to continue in their employment perhaps their cessation to function might affect the government like a big hammer to the head. I can dream, can't I?

Posted by: Willliam Borgstrom | Jan 19, 2007 6:29:04 PM

My second wife worked for a federal agency, and every year they put up signs 'reminding' employees that just because they worked for the federal government, they were not exempt from paying taxes.

She talked to one of the supervisors, and was amazed at how many people in the agency hadn't filed a return for two years or more: I think it was something like 20-25%.

Posted by: Firehand | Jan 19, 2007 3:59:07 PM

If you could choose from among them all, I wonder what's the minimum number of *private-sector* scofflaws you would need to add together to get a delinquent tax bill >= $2.8 billion.

I ask the question having absolutely no idea and having done no research. But inasmuch as that's where the money is ....

Posted by: Lex | Jan 19, 2007 10:40:05 AM

One of the likely explanations for the larger numbers of military (Active Duty, Guard and Reserve) who had not filed 2005 Tax returns as of the date in which the data was gathered, might very well be because they are deployed to Iraq or Afghanistan, and have been granted extensions equal to the length of their deployments plus 180 days from original filing deadline. IRS and state Tax Laws provide automatic deferrment of filing until 180 days after combat deployments.

I myself didn't file my TY 2004 returns until in January 2006, as I was activated in May 2004, sent to Iraq in Jan 2005, returned in Nov 2005, and did not need to file until sometime in May 2006. (So I was early.)

Not to say there may not be scofflaws in the military, just that the data here shows no signs of being adjusted to reflect legitimate filing extensions due to deployments.

Posted by: dadmanly | Jan 19, 2007 9:55:40 AM

The large download site for the IRS is here:,,id=102174,00.html

Consider this sheet for Delinquent Collection Activities:
As stated in the sheet, all dollars are in $k or thousands of dollars, so add on three trailing zeros. The the 2005 Assessed tax, penalties, penalties and interest is $57.6 Billion. The amount of taxes due is $37.1 Billion. Yielding $20.5 Billion in tax penalties, interest and uncollected taxes.

On delinquent accounts of $22.7 Billion only $3.6 Billion were collected. So the $2.8 Billion from Federal workers/retirees is about 10% of all delinquent accounts. If that makes the Government a bunch of 'scofflaws' what does that say about the general public? And what does that *also* say about the Government's ability to actually administer the taxation system if so many employees can get by without payment? I mean federal employees do get their money from the Treasury, after all, should be pretty simple to assess penalties and taxes if those in charge of the system are doing the paying out....

Posted by: ajacksonian | Jan 19, 2007 9:33:57 AM

And that's just for the tax year 2005.

I wonder how much is still owed for past tax years?

Posted by: Anonymous Coward | Jan 19, 2007 8:22:08 AM

Your "absolute terms" list is somewhat deceptive in that line item 3 is "Active Military Duty", then you see fit to list the Army, Navy, and Air Force as line items 5, 6, and 7.

Posted by: George | Jan 19, 2007 8:08:08 AM

Interesting numbers, but they need context. What percentage of the general population are tax scofflaws?

Posted by: Matt | Jan 19, 2007 7:52:45 AM