Contractors and Back Taxes

By Charles S. Clark

March 8, 2012

Two senators have trained their sights on the largest contractor in the U.S. war effort in Afghanistan. According to a recent USA Today story, Sens. Tom Carper, D-Del., and Tom Coburn, R-Okla., have sent a letter to Defense Secretary Leon Panetta asking him to look into the tax situation of Leonie Industries, which they say owes more than $4 million in unpaid federal taxes since 2006.

"As you know, when U.S. military personnel have delinquent debts, the Department of Defense can be ordered to garnish their wages until these debts have been settled," Carper and Coburn wrote in the letter. "If our wartime contractors -- or any of the department's contractors, for that matter -- have accumulated sizable tax debts, then we believe that similar action should be taken against these contractors."

The senators ask the Pentagon to respond by March 27 to questions such as whether  the Pentagon withheld any money awarded to Leonie Industries for the "marketing and media services" in order to pay off the owners' tax debt; whether Pentagon officials knew of tax liens on Leonie's owners; and whether current Pentagon rules require consideration of  the tax delinquency of a company that is competing for a contract.


By Charles S. Clark

March 8, 2012

http://www.govexec.com/federal-news/fedblog/2012/03/contractors-and-back-taxes/41420/