TIGTA: Hundreds of Employees of IRS Contractors Owe Millions in Taxes

The Treasury Inspector General for Tax Administration today released Contractor Employees Have Millions of Dollars of Federal Tax Debts (2013-10-082):

The IRS requires that its own employees file their Federal tax returns on time and pay any Federal tax debt. However, TIGTA identified hundreds of employees working for IRS contractors (contractor employees) who were not held to that same standard. The IRS should address tax noncompliance for these contractor employees to ensure that all individuals employed by the IRS, whether as Federal employees or contractor employees, are tax compliant.

The overall objective of this audit was to determine the effectiveness of the IRS’s background investigation process to identify contractor employees who do not file required Federal tax returns or who owe Federal taxes but are not currently on a payment plan.

As of June 14, 2012, 691 (5 percent) of the 13,591 IRS contractor employees reviewed by TIGTA had $5.4 million in Federal tax debt. These Federal tax debts were either agreed to by the taxpayers or affirmed by the court. Of the 691 contractor employees, 352 were not currently on a payment plan to resolve their tax debt. ...