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Federal Employees Under Fire for Unpaid Taxes

September 5th

In recent months, as the government has been struggling to find additional funds, the discovery has been made that a significant revenue stream may exist in the form of back taxes owed by federal employees. In fact, according to an IRS study last year, it is estimated that federal employees and retirees owe a staggering $3.3 billion in unpaid taxes.

The US Postal Service was the largest offender, with hundreds of thousands of employees owing a total of more than $283 million in back taxes. Also high on the list was the Department of Veterans Affairs, with a total sum owed by employees exceeding $156 million.

However, the greatest offenders were found amongst retired military personnel. This group alone was found to owe more than $1.5 billion dollars in unpaid taxes

Penalties for Federal Employees Owing Back Taxes

One of the chief difficulties when the study was initially conducted was determining how to collect this money. Though the IRS concluded that the money was owed, it was not simply so easy as taking the tax money out of federal paychecks.

However, Senators Tom Coburn (R-OK) and Claire McCaskill (D-MO) recently jointly introduced a bill, which would require that federal employees be fired for not paying their federal taxes on time.

The senators argue that federal employees ought to lead by example, and to do otherwise is an affront to the law and an insult to ordinary taxpayers. This legislation would be instrumental in gathering the $3 billion in unpaid taxes owed by federal employees.

The legislation would not apply to employees who made oversights on their personal taxes, but agreed to pay them, or to any individuals currently in dispute with the IRS over delinquency charges. It would also exclude anyone who is currently paying taxes through an installment plan or anyone who was paying through any kind of offer in compromise.

 
 
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