The House approved legislation last week that would allow federal employees with seriously delinquent tax debts to be terminated.

H.R. 828, the Federal Employee Tax Accountability Act, sponsored by Rep. Jason Chaffetz, R-Utah, passed by a bipartisan vote of 263 to 114. 

The legislation would not only terminate the employment of current tax delinquent federal employees, but would also prohibit the hiring of future federal employees who already have a seriously delinquent tax debt.

“Employees who consciously ignore the channels and processes in place to fulfill their tax obligations must be held accountable,” Chaffetz said in a statement. “In short, if you refuse to pay your federal taxes you should be fired.”

According to the IRS, more than 98,000 federal civilian employees owed more than $1 billion in unpaid federal income taxes in 2010. The average delinquency rate for federal civilian employees was 3.33 percent. While the number of delinquent federal employees has remained fairly constant since 2004, the amount owed has increased nearly 72 percent.

Under current law, only IRS employees can be terminated for failing to file a federal income tax return. H.R. 828 would expand on this and requires all federal employees to pay their taxes or lose their tax-payer funded job. The legislation would not affect federal employees who enter installment agreements to pay off their tax debts. In addition, designating a taxpayer as “seriously delinquent” is a multi-step procedure that affords the federal employee due process. Under the legislation, if a federal employee is trying to pay their back taxes, they would remain an employee of the federal government.

“The intent of the bill is simple: If you are a federal employee or applicant, you should be making a good faith effort to pay your taxes or to dispute them, as all taxpayers have the right to do,” added Chaffetz.

Year

Number of Delinquent Federal Employees

Dollar Amount of Delinquencies

2004     

    102,794

$599.8 million

2005

    110,851

$681.3 million

2006

    102,962

$693.4 million

2007

    102,213

$844.4 million

2008

    97,200

$962.1 million

2009

2010

    99,036

    98,291

$1.002 billion

$1.034 billion

 

 

 

Source: Internal Revenue Service FERDI. Excludes federal employees who owe taxes but have entered into repayment agreements.

Under H.R. 828, individuals with seriously delinquent tax debts are ineligible for federal civilian employment in the executive and legislative branch. “Seriously tax delinquent” is defined as an outstanding federal tax debt for which a notice of lien has been publicly filed.

H.R. 828 passed in the House on July 31 and will now move to the Senate for consideration. However, Congress began a five-week recess this week.

Year

Number of Delinquent Federal Employees

Dollar Amount of Delinquencies

2004     

    102,794

$599.8 million

2005

    110,851

$681.3 million

2006

    102,962

$693.4 million

2007

    102,213

$844.4 million

2008

    97,200

$962.1 million

2009

2010

    99,036

    98,291

$1.002 billion

$1.034 billion

Source: Internal Revenue Service FERDI. Excludes federal employees who owe taxes but have entered into repayment agreements.