Employees Who Qualify for Security Clearances Owe $85M in Back Taxes

Mmaxer/Shutterstock.com

Some 8,400 federal employees and contractors who went through background checks for security clearances owe cumulatively about $85 million in unpaid federal taxes, according to the Government Accountability Office.

This amounts to 3.4 percent of the civilian executive branch employees and contractors who received clearances from 2006 through 2011, about 4,700 of whom were full-time agency employees, the watchdog found. Some 4,200 of them are already on a payment plan to achieve balance with the Internal Revenue Service.

“Federal law does not expressly prohibit an individual with unpaid federal taxes from being granted a security clearance,” GAO wrote in a report requested by Sens. Tom Coburn, R-Okla.; Orrin Hatch, R-Utah; and Susan Collins, R-Maine, and House Ways and Means Committee Chairman Rep. Dave Camp, R-Mich. “However, tax debt does pose a potential vulnerability that must be considered in making a broader determination of whether an applicant should be granted a security clearance.”

GAO’s investigation of applicants for secret and top-secret-level security clearances focused on civilians at the Homeland Security, State and Energy departments, not on the Defense Department or Intelligence Community. “Our review did not include the review of confidential clearance holders or public trust positions,” the report said. It examined clearance data from the Office of Personnel Management’s Central Verification System database, though policy on clearances is the responsibility of the Office of the Director of National Intelligence.

The missing $85 million in back taxes among security clearance holders is only a fraction of the tax gap that the IRS estimated in 2012 at $364 billion. But agencies, despite having established mechanisms for identifying unpaid tax debts, demonstrated shortcomings in their investigative tools such as relying too much on applicant self-reporting and credit reports that state whether the IRS has filed a lien on the taxpayer.

“There is no process to detect unpaid federal tax debts accrued after an individual has been favorably adjudicated unless it is self-reported, reported by a security manager due to garnishment of wages, or discovered during a clearance renewal or upgrade,” auditors said. About three-quarters of the tax debtors took on the debt after approval of a security clearance, which may be good for 10 years.

To improve the thoroughness of the background checks, GAO recommended that ODNI study the feasibility of allowing agencies to routinely obtain federal debt information from the Treasury Department while adjudicating clearance applicants, as well as for monitoring current clearance holders' tax-debt status. ODNI, DHS and OPM agreed with GAO's recommendation.

(Image via Mmaxer/Shutterstock.com)

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    View
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    View
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    View
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    View
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    View
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    View
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    View

When you download a report, your information may be shared with the underwriters of that document.