Senate expected to take up bill allowing IRS to levy TSP accounts

Rep. Ann Marie Buerkle, R-N.Y., sponsored the bill. Rep. Ann Marie Buerkle, R-N.Y., sponsored the bill. House Committee on Oversight and Government Reform

Legislation that would allow the Internal Revenue Service to tap Thrift Savings Plan accounts to collect unpaid federal taxes is on track to become law before the end of the year.

The Senate will take up a bill the House passed this summer (H.R. 4365) ensuring TSP accounts are subject to a law that allows the IRS to collect unpaid federal taxes by levy -- the process of ordering a third party to turn over property of taxpayers who are delinquent. Lawmakers plan to act on the legislation before Congress adjourns in December, said Kim Weaver, director of external affairs for the Federal Retirement Thrift Investment Board, which oversees the TSP. Weaver provided the update during the board’s monthly meeting in Washington on Tuesday.

The 1986 Federal Employees Retirement System Act protects some assets in TSP accounts from levy. FRTIB asked Congress to clarify whether the IRS had the authority to levy the TSP funds of civil servants who are delinquent on their taxes.

The Congressional Budget Office estimated that the bill, sponsored by Rep. Ann Marie Buerkle, R-N.Y., would result in an additional $24 million in revenue from 2013 to 2022 if enacted into law.

“This legislation rights a wrong that allowed federal employees to benefit from a tax loophole,” said Buerkle when the bill passed in August. “It ensures that when it comes to paying taxes federal employees do not receive special treatment that private sector employees do not.”

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.

The House also passed legislation in August that would prohibit the government from hiring job applicants with seriously delinquent tax debt and allow Uncle Sam to fire current employees who don’t pay their taxes. Under current law IRS employees can be fired for failing to pay their taxes. That bill is currently in Senate committee.

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:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

    Download
  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download

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