Delinquent on Your Tax Bills? You Could Soon Get Fired

Senate panel picks up legislation that failed in the House.

A Senate committee on Wednesday approved a measure to prohibit “seriously delinquent” taxpayers from federal employment.

The bill, introduced by Sen. Tom Coburn, R-Okla., and cosponsored by Sen. Mark Pryor, D-Ark., cleared the Homeland Security and Governmental Affairs Committee without objection. The legislation mirrors a House bill that was voted down last year when it failed to draw the two-thirds majority it required for passage.

The measure would apply to executive and legislative branch employees as well as U.S. Postal Service workers who are delinquent on their taxes and have not entered into an agreement with the government to repay the debt. The legislation would also prohibit the government from hiring job applicants with seriously delinquent tax debt.

The measure 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.

According to an IRS report, 107,658 federal civilian employees owed more than $1 billion in unpaid federal income taxes in 2011 -- a delinquency rate of 3.6 percent of the total civilian workforce. That’s less than half the tax delinquency rate of the general public, which is 8.2 percent. Retired civilians had a tax delinquency tab of about $533 million. More than 94,000 military retirees owed $1.6 billion in unpaid taxes in 2011, and active-duty service members owed about $109 million, the IRS report found. The figures do not include federal employees or military service members who owe taxes but have repayment agreements.

A more recent report from the Treasury Inspector General for Tax Administration found the IRS gave $1.1 million in bonuses to employees who did not pay or underreported their taxes.

The National Treasury Employees Union has called the House legislation unnecessary, saying agencies can already take action against delinquent employees and garnish their wages to collect tax debts.

The Senate oversight committee also passed the House-backed Taxpayers Right to Know Act, which would require federal agencies to identify and describe each program they administer, the associated costs, the number of program beneficiaries and the number of  federal and contract employees involved. The bill would also require each agency to post all of this information on its website.

TRICARE and Health Savings Accounts: A Choice

A bipartisan pair of lawmakers introduced a bill this week that would allow veterans to participate in a health savings account.

The TRICARE Choice Act would allow military retirees to voluntarily pause their TRICARE benefits in order to participate in the health savings account program. HSAs allow employees to set aside tax-free funds into an account that is invested and used to pay for medical expenses. TRICARE participants are currently prohibited from creating such an account.

“Veterans in the private sector deserve the same access to quality health care options that their civilian co-workers enjoy,” said Rep. Tulsi Gabbard, D-Hawaii, one of the bill’s sponsors.

Chris Stewart, R-Utah, cosponsored the bill.

“It’s important that we honor our veterans by ensuring that they have access to the best health care options for themselves and their families,” Stewart said.

In other TRICARE news, a federal judge ruled earlier this month that most plaintiffs in a class action suit against the Defense Department could not claim damages from a massive data leak in 2011.

Personal information from 4.7 million military members and their families was put at risk when a thief broke into the car of an employee with Science Applications International Corp., a TRICARE contractor. The judge of the U.S. District Court in Washington, D.C. said it was highly unlikely the thief knew what he was taking, let alone that he could decrypt the stolen information and use it maliciously. 

(Image via Dooder/