Federal Workforce Tax Accountability

On Wednesday, March 18th, the House Oversight and Government Reform Subcommittee on Government Operations will hold a hearing  to examine “Federal Workforce Tax Accountability.” The hearing will  consider reforms to ensure federal employees and contractors have fulfilled their federal tax obligations.

Background:

• The Standards of Ethical Conduct for Employees of the Executive Branch state that all executive branch employees are responsible for satisfying in good faith their financial obligations, especially those imposed by law.
• Since 1992, the Internal Revenue Service has used the Federal Employee/Retiree Delinquency Initiative (FERDI) program to promote federal tax compliance among current and retired federal employees.  The program incorporates the purpose and intent of the aforementioned Standards of Ethical Conduct for the Executive Branch. According to the 2013 report, civilian employees owed $1.076 billion in federal taxes, and 4.07 percent of the federal workforce was considered delinquent.
• The Government Accountability Office (GAO) has reported that thousands of government contractors had substantial amounts of unpaid federal taxes.  Specifically, about 27,000 defense contractors, 33,000 civilian agency contractors, and 3,800 General Services Administration contractors owed approximately $3 billion, $3.3 billion, and $1.4 billion in unpaid taxes, respectively.