Federal employees who fail to pay their taxes can be fired under a bill the House passed Tuesday.
The legislation, which passed in a bipartisan 263-114 vote, would apply to executive and legislative branch employees as well as Postal Service workers who are delinquent on their taxes and have not entered into an agreement with the government to repay the debt. The bill also would prohibit the government from hiring job applicants with seriously delinquent tax debt. The legislation defines seriously delinquent tax debt as outstanding debt to the federal government for which a public lien has been filed.
Under current law Internal Revenue Service employees can be fired for failing to pay their taxes.
Rep. Jason Chaffetz, R-Utah, sponsor of the bill (H.R. 828), said employees who make a good-faith effort to pay back taxes will not get the ax. “We are not trying to cut someone off at the knees if they are trying to do the right thing,” he said Tuesday on the House floor.
According to an IRS report, more than 98,000 federal civilian employees owed more than $1 billion in unpaid federal income taxes in 2010, while retired civilians had a tax delinquency tab of $470 million. More than 83,000 military retirees owed nearly $1.6 billion in unpaid taxes in 2010, and active-duty service members owed about $111 million, the IRS report found. The tally does not include federal employees or military service members who owe taxes but have repayment agreements.
Still, federal workers have a better compliance rate than the general public: more than 96 percent of feds pay their taxes on time and do not owe the government money. “Most federal employees that I have run into are good patriots and people who are trying to do the right thing,” Chaffetz said. “But, unfortunately, we have some who aren’t doing the right thing.”
The Congressional Budget Office estimated that if enacted the legislation would cost $1 million in 2012 and less than $500,000 annually after that “to create certification forms, develop new regulations, and review records of current and prospective employees.” Rep. Carolyn Maloney, D-N.Y., said Tuesday that while everyone, including federal workers, should pay their taxes, the Chaffetz bill would not have a significant impact on revenue, and laws already are in place to deal with delinquent taxpayers. Maloney, who serves on the House Oversight and Government Reform Committee with Chaffetz, said lawmakers’ time would be better spent on strengthening the civil service and making government more efficient than on “symbolic gestures” that reinforce a negative image of the federal workforce.
Jessica Klement, communications and legislative representative for the National Active and Retired Federal Employees Association, said it was “irresponsible of the House to pass legislation that not only costs money to administer, but also fails to include a mechanism for recouping owed taxes.” Klement said while NARFE members do not support the actions of feds who “knowingly neglect to pay their taxes,” enforcing the current laws related to delinquent taxpayers should be the first priority before firing people. “The unemployed rarely make for good taxpayers,” she said.
H.R. 828 now heads to the Senate for consideration.