Washington -- More than 27,000 defense contractors paid by the Department of Defense in fiscal 2002 owed more than $3 billion in unpaid taxes, according to a report from the General Accounting Office.

In its study, the auditor general said the Defense Department had failed to implement the seven-year-old Debt Collection Improvement Act, designed to help reclaim back taxes from defense contractors. The GAO argued that the “inconsistent participation” by the DOD in that strategy resulted in just $687,000 being collected from delinquent contractors as of Sept. 30, 2003.

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