[House Report 114-73]
[From the U.S. Government Publishing Office]
114th Congress } { Rept. 114-73
HOUSE OF REPRESENTATIVES
1st Session } { Part 1
======================================================================
FEDERAL EMPLOYEE TAX ACCOUNTABILITY ACT OF 2015
_______
April 14, 2015.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Chaffetz, from the Committee on Oversight and Government Reform,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 1563]
[Including cost estimate of the Congressional Budget Office]
The Committee on Oversight and Government Reform, to whom
was referred the bill (H.R. 1563) to amend title 5, United
States Code, to provide that individuals having seriously
delinquent tax debts shall be ineligible for Federal
employment, and for other purposes, having considered the same,
report favorably thereon without amendment and recommend that
the bill do pass.
CONTENTS
Page
Committee Statement and Views.................................... 2
Section-by-Section............................................... 4
Explanation of Amendments........................................ 5
Committee Consideration.......................................... 5
Roll Call Votes.................................................. 5
Correspondence................................................... 6
Application of Law to the Legislative Branch..................... 8
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 8
Statement of General Performance Goals and Objectives............ 8
Duplication of Federal Programs.................................. 8
Disclosure of Directed Rule Makings.............................. 8
Federal Advisory Committee Act................................... 8
Unfunded Mandate Statement....................................... 8
Earmark Identification........................................... 9
Committee Estimate............................................... 9
Budget Authority and Congressional Budget Office Cost Estimate... 9
Changes in Existing Law Made by the Bill, as Reported............ 10
Minority Views................................................... 14
Committee Statement and Views
PURPOSE AND SUMMARY
Most taxpayers file accurate tax returns and pay the taxes
they owe on time, regardless of their income. Federal employees
and individuals applying for federal employment should do the
same. In 2014, the most recent year for which Internal Revenue
Service (IRS) data is available, 113,805 civilian federal
employees owed more than $1 billion in taxes. The average
delinquency rate for federal civilian employees was 3.99
percent.\1\
---------------------------------------------------------------------------
\1\Internal Revenue Service, Federal Employee/Retiree Delinquency
Initiative (FERDI) Civilian/Military/Retiree Summary Report, September
30, 2014.
---------------------------------------------------------------------------
Employees who consciously ignore the channels and processes
in place to fulfill their tax obligations must be held
accountable. The Federal Employee Tax Accountability Act of
2015 addresses this area of non-compliance with our tax laws by
prohibiting individuals with seriously delinquent tax debt from
federal civilian employment. The intent of the bill is simple:
If you are a federal worker or applicant, you should be making
a good faith effort to pay your taxes or dispute them, as all
taxpayers have the right to do. Holding federal employees who
fail to meet their taxpayer obligations accountable will foster
public confidence in the federal workforce.
The Committee on Oversight and Government Reform agrees
with the General Accountability Office that ``voluntary
compliance with tax law, the foundation of the U.S. tax system,
could be undermined if the public perceives that federal
workers and former federal workers successfully evade their tax
obligations.\2\
---------------------------------------------------------------------------
\2\U.S. General Accountability Office, Internal Revenue Service:
Unpaid Taxes of Federal Workers and Annuitants, GAO-01-195 (Washington,
D.C.: June 2001).
---------------------------------------------------------------------------
BACKGROUND AND NEED FOR LEGISLATION
Federal employees are called to account for paying taxes by
the Standards of Ethical Conduct for Executive Branch
Employees, which dictates that federal employees must ``satisfy
in good faith their obligations as citizens, including all just
financial obligations, especially those such as federal, state,
or local taxes that are imposed by law.''\3\
---------------------------------------------------------------------------
\3\5 CFR 2635.809.
---------------------------------------------------------------------------
The IRS urges individuals to resolve their taxpayer
obligations. Taxpayers who fail to pay all they owe receive a
Notice of Tax Due and Demand for Payment, a bill including the
tax owed plus interest and penalties. If the taxpayer does not
respond to the first notice or subsequent notices sent by the
IRS, their account balance becomes delinquent.
Delinquent accounts may be turned over for collection,
during which time an attempt will be made to reach agreement on
a payment plan. Taxpayers who cannot pay their taxes on time
have a number of options, including (1) extension of time to
pay; (2) installment agreement; (3) delayed collection; and (4)
offer in compromise. Taxpayers who fail to cooperate with
payment options may be subject to enforced collection action.
The IRS affords individuals several avenues for
reconsideration, including the right to appeal the collection
action.
In 1993, the IRS established the Federal Employee/Retiree
Delinquency Initiative (FERDI) to promote federal tax
compliance among current and retired federal employees. Under
FERDI, the IRS annually identifies federal employees who are
tax delinquent and provides agencies with a snapshot of
compliance. In addition, the IRS sends a letter to Chief Human
Capital Officers of agencies with more than 25 employees and a
tax delinquency rate greater than zero. The letters provide
information on the delinquency rate and request the agencies'
support in promoting tax compliance among their employees. The
IRS also provides information to support employee communication
on tax compliance.\4\
---------------------------------------------------------------------------
\4\Statement of Beth Tucker, Deputy Commissioner, Wage and
Investment Division, Internal Revenue Service, for hearing entitled,
``H.R. 4735, a bill to amend title 5, United States Code, to provide
that persons having seriously delinquent tax debts shall be ineligible
for federal employment,'' U.S. House Subcommittee on Federal Workforce,
Postal Service and the District of Columbia, March 17, 2010, at pp 15-
18.
---------------------------------------------------------------------------
To help the IRS collect delinquent taxes more effectively,
Congress included a provision in the Taxpayer Relief Act of
1997\5\ authorizing the establishment of the Federal Payment
Levy Program (FPLP), which allows the IRS to continuously levy
up to 15 percent of certain federal payments made to delinquent
taxpayers. Federal payments that can be levied through the FPLP
include federal salaries, federal annuities, and federal
employee advances or reimbursements.
---------------------------------------------------------------------------
\5\26 USC 6331(h).
---------------------------------------------------------------------------
In March 2011, the Chief Human Capital Officers Council met
to develop strategies to reduce the number of federal employees
with delinquent tax liabilities. Agency heads discussed the
federal employee delinquency rate in communications related to
tax filing deadlines. For example, Office of Personnel
Management Director John Berry sent an email reminding OPM
employees of their responsibility to pay their taxes.\6\
---------------------------------------------------------------------------
\6\Email from John Berry, Director, U.S. Office of Personnel
Management, April 15, 2011.
---------------------------------------------------------------------------
Despite these efforts, the percentage of federal employees
with delinquent tax liabilities has increased. In 2014, the
most recent year for which IRS data is available, 113,805
federal civilian workers owed $1,141,622,621 in taxes. The 2014
data represents a six percent increase in amount owed by
federal civilian employees. The average delinquency rate for
federal civilian employees was 3.99 percent.\7\
---------------------------------------------------------------------------
\7\Internal Revenue Service, Federal Employee/Retiree Delinquency
Initiative (FERDI) Civilian/Military/Retiree Summary Report, September
30, 2011.
---------------------------------------------------------------------------
The IRS workforce consistently achieves the lowest tax
delinquency rate in the federal government. From fiscal year
2009 to 2013, IRS employees had a 0.8 percent delinquency rate,
compared to 3.3 percent for civilian workers throughout the
federal government. Section 1203(b) of the IRS Restructuring
and Reform Act of 1998 requires the removal of IRS employees
who are found to have willfully failed to timely file their
federal tax return, or who willfully understate their tax
liability.\8\
---------------------------------------------------------------------------
\8\P.L. 105-206.
---------------------------------------------------------------------------
LEGISLATIVE HISTORY
On March 24, 2015, Chairman Jason Chaffetz (R-UT)
introduced the Federal Employee Tax Accountability Act of 2015
(H.R. 1563). The bill was referred to the Committee on
Oversight and Government Reform and on March 25, 2015, the
Committee ordered H.R. 1563 to be favorably reported. The
Subcommittee on Government Operations held a hearing to discuss
federal employee and contractor tax compliance on March 18,
2015.
In past Congresses, similar bills seeking to improve
federal employees' tax compliance have been considered.
During the 111th Congress, Congressman Chaffetz introduced
H.R. 4735, a bill to amend title 5, United States Code, to
provide that persons having seriously delinquent tax debts
shall be ineligible for federal employment. H.R. 4735 was
unsuccessfully offered as an amendment to H.R. 572, the
Contracting and Tax Accountability Act of 2009 during Committee
consideration of H.R. 572 on March 4, 2010. H.R. 572 was not
reported by the Committee during the 111th Congress. The
Subcommittee on Federal Workforce, Postal Service, and the
District of Columbia held a hearing to consider the legislation
on March 17, 2010.
During the 112th Congress, H.R. 4735 was reintroduced by
Congressman Chaffetz on February 28, 2011 as H.R. 828. On April
13, 2011, the Committee on Oversight and Government Reform
ordered H.R. 828 favorably reported, as amended, by voice vote.
On July 31, 2012, H.R. 828 was passed by the House under
suspension of the rules by a vote of 263-114 (Roll no. 538).
The bill was referred to the Senate Committee on Homeland
Security and Governmental Affairs. Senator Tom Coburn (R-OK)
introduced similar legislation, S. 376, on February 27, 2011.
The bill was referred to the Senate Committee on Homeland
Security and Governmental Affairs. No further action was taken
during the 112th Congress.
During the 113th Congress, H.R. 828 was reintroduced by
Congressman Chaffetz on January 15, 2013 as H.R. 249. On March
20, 2013, the Committee on Oversight and Government Reform
ordered reported favorably the bill, H.R. 249, by voice vote.
On April 15, 2013, H.R. 249 was considered by the House under
suspension of the rules. The bill failed by the yeas and nays,
250-159 (Roll no. 105). Senator Coburn introduced similar
legislation, S. 1045, on May 23, 2013. On November 13, 2014,
the Senate Committee on Homeland Security and Governmental
Affairs reported the bill, as amended, to the full Senate. S.
1045 was placed on the Placed on Senate Legislative Calendar
under General Orders. Calendar No. 596. No further action was
taken.
Section-by-Section
Section 1. Short title
Establishes the short title of the bill as ``Federal
Employee Tax Accountability Act of 2015''.
Section 2. Ineligibility of noncompliant taxpayers for federal
employment
Individuals having seriously delinquent tax debts are
ineligible for federal employment in the executive and
legislative branch. ``Seriously tax delinquent'' is defined as
an outstanding federal tax debt that has been assessed and may
be collected by levy or court proceeding. The bill exempts
employees who are working to settle tax liabilities by
excluding federal tax debts being paid in accordance with an
installment agreement, offer of compromise, or wage
garnishment; for which a due process hearing or request for
relief from joint and several liability is requested or
pending; or for which relief has been granted.
The bill prescribes a scheme for conducting the tax reviews
necessary to identify individuals who are seriously tax
delinquent that is based on the July 29, 1977 Treasury
Department Order granting the Internal Revenue Service (IRS)
Commissioner authority to undertake tax checks. First, agencies
identify individuals ineligible for employment by requiring
applicants to certify they are not seriously tax delinquent.
Second, agencies periodically conduct reviews of public records
for liens. If a lien is discovered, the individual submits a
form to the agency authorizing the Secretary of the Treasury to
disclose to the agency head information on whether or not the
individual has a seriously delinquent tax debt. Tax information
disclosed to the agency head is confidential.
The Office of Personnel Management (OPM), in consultation
with the IRS, establishes regulations to implement the bill.
Individuals must be provided full due process rights and have
180 days to demonstrate their debt meets one of the exemptions
(e.g. an individual has entered into an installment agreement).
The bill provides a financial hardship exemption if the
individual's service is in the best interests of the United
States, and requires OPM to report annually to Congress on the
number of financial hardship exemptions granted.
Federal employees are subject to termination for willful
failure to file their taxes or underreport a tax liability,
similar to IRS employees. Federal employees subject to
termination for these reasons may appeal the adverse action to
the Merit Systems Protection Board and the courts.
Section 3. Effective date
The bill takes effect 9 months after the date of enactment.
Explanation of Amendments
No amendments were offered during Full Committee
consideration of the bill.
Committee Consideration
On March 25, 2015, the Committee met in open session and
ordered reported favorably the bill, H.R. 1563, by voice vote,
a quorum being present.
Roll Call Votes
There were no recorded votes during Full Committee
consideration of the bill.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to the terms and conditions of
employment or access to public services and accommodations.
This bill amends title 5, United States Code, to provide that
individuals having seriously delinquent tax debts shall be
ineligible for Federal employment. As such, this bill relates
to employment or access to public services and accommodations.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
(2)(b)(1) of rule X of the Rules of the House of
Representatives, the Committees oversight findings and
recommendations are reflected in the descriptive portions of
this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committees performance
goal or objective of the bill is to amend title 5, United
States Code, to provide that individuals having seriously
delinquent tax debts shall be ineligible for Federal
employment.
Duplication of Federal Programs
No provision of this bill establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
Section 2 requires the Office of Personnel Management, in
consultation with the Internal Revenue Service, to promulgate
necessary regulations, including provisions to ensure due
process for federal employees and applicants with seriously
delinquent tax debt.
Federal Advisory Committee Act
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of 5 U.S.C. App., Section 5(b).
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandate Reform Act, P.L. 104-4) requires a statement as to
whether the provisions of the reported include unfunded
mandates. In compliance with this requirement the Committee has
received a letter from the Congressional Budget Office included
herein.
Earmark Identification
This bill does not include any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Committee Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
this bill. However, clause 3(d)(2)(B) of that rule provides
that this requirement does not apply when the Committee has
included in its report a timely submitted cost estimate of the
bill prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act of
1974.
Budget Authority and Congressional Budget Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause (3)(c)(3) of rule XIII of the Rules
of the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for this bill from the Director of
Congressional Budget Office:
H.R. 1563--Federal Employee Tax Accountability Act of 2015
H.R. 1563 would amend federal law regarding federal
employees and delinquent taxes. Under the legislation,
individuals with federal tax debt that is seriously delinquent
would be ineligible to be appointed or to continue serving as
an employee of the federal government.
The legislation defines seriously delinquent tax debt as
outstanding tax debt to the federal government that may be
collected through a levy (legal seizure of property) or
proceedings in court. Tax debt that is being paid in a timely
manner or is part of a requested or pending collection-due-
process hearing would not be considered seriously delinquent.
Under the bill, federal agencies would be required to have job
applicants certify that they do not have such debt. The
legislation also would allow agencies to review the public
records of applicants or current employees. Under the bill, if
a current federal employee were found to be willfully not
paying taxes they could be fired. For new employees, if a tax
lien were discovered, agencies would be authorized to ask
affected individuals to disclose the status of that lien.
Based on information from the Office of Management and
Budget, the Internal Revenue Service, and the Joint Committee
on Taxation (JCT), CBO estimates that, implementing H.R. 1563
would cost $1 million over the 2016-2020 period, subject to the
availability of appropriated funds. That amount would be used
to create certification forms, develop new regulations, and
review records of current and prospective employees.
The bill would affect direct spending by agencies not
funded through annual appropriations. CBO estimates, however,
that any net increase in spending by those agencies would not
be significant. JCT staff estimate that enacting the bill would
have a negligible effect on revenues. Because the bill would
affect direct spending and revenues, pay-as-you-go procedures
apply.
H.R. 1563 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by Theresa Gullo, Assistant
Director for Budget Analysis.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
TITLE 5, UNITED STATES CODE
* * * * * * *
PART III--EMPLOYEES
* * * * * * *
Subpart F--LABOR-MANAGEMENT AND EMPLOYEE RELATIONS
* * * * * * *
CHAPTER 73--SUITABILITY, SECURITY, AND CONDUCT
SUBCHAPTER I--REGULATION OF CONDUCT
Sec.
7301. Presidential regulations.
* * * * * * *
SUBCHAPTER VIII--INELIGIBILITY OF NONCOMPLIANT TAXPAYERS FOR FEDERAL
EMPLOYMENT
7381. Definitions.
7382. Ineligibility for employment.
7383. Review of public records.
7384. Confidentiality.
7385. Adverse actions for employees who fail to file or underreport
taxes.
* * * * * * *
SUBCHAPTER VIII--INELIGIBILITY OF NONCOMPLIANT TAXPAYERS FOR FEDERAL
EMPLOYMENT
Sec. 7381. Definitions
For purposes of this subchapter--
(1) The term ``seriously delinquent tax debt'' means
a Federal tax liability that has been assessed by the
Secretary of the Treasury under the Internal Revenue
Code of 1986 and may be collected by the Secretary by
levy or by a proceeding in court, except that such term
does not include--
(A) a debt that is being paid in a timely
manner pursuant to an agreement under section
6159 or section 7122 of such Code;
(B) a debt with respect to which a collection
due process hearing under section 6330 of such
Code, or relief under subsection (a), (b), or
(f) of section 6015 of such Code, is requested
or pending;
(C) a debt with respect to which a continuous
levy has been issued under section 6331 of such
Code (or, in the case of an applicant for
employment, a debt with respect to which the
applicant agrees to be subject to such a levy);
and
(D) a debt with respect to which such a levy
is released under section 6343(a)(1)(D) of such
Code;
(2) the term ``employee'' means an employee in or
under an agency, including an individual described in
sections 2104(b) and 2105(e); and
(3) the term ``agency'' means--
(A) an Executive agency;
(B) the United States Postal Service;
(C) the Postal Regulatory Commission; and
(D) an employing authority in the legislative
branch.
Sec. 7382. Ineligibility for employment
(a) In General.--Subject to subsection (c), any individual
who has a seriously delinquent tax debt shall be ineligible to
be appointed or to continue serving as an employee.
(b) Disclosure Requirement.--The head of each agency shall
take appropriate measures to ensure that each individual
applying for employment with such agency shall be required to
submit (as part of the application for employment)
certification that such individual does not have any seriously
delinquent tax debt.
(c) Regulations.--The Office of Personnel Management, in
consultation with the Internal Revenue Service, shall, for
purposes of carrying out this section with respect to the
executive branch, promulgate any regulations which the Office
considers necessary, except that such regulations shall provide
for the following:
(1) All applicable due process rights, afforded by
chapter 75 and any other provision of law, shall apply
with respect to a determination under this section that
an applicant is ineligible to be appointed or that an
employee is ineligible to continue serving.
(2) Before any such determination is given effect
with respect to an individual, the individual shall be
afforded 180 days to demonstrate that such individual's
debt is one described in subparagraph (A), (B), (C), or
(D) of section 7381(a)(1).
(3) An employee may continue to serve, in a situation
involving financial hardship, if the continued service
of such employee is in the best interests of the United
States, as determined on a case-by-case basis.
(d) Reports to Congress.--The Director of the Office of
Personnel Management shall report annually to Congress on the
number of exemptions requested and the number of exemptions
granted under subsection (c)(3).
Sec. 7383. Review of public records
(a) In General.--Each agency shall provide for such reviews
of public records as the head of such agency considers
appropriate to determine if a notice of lien has been filed
pursuant to section 6323 of the Internal Revenue Code of 1986
with respect to an employee of or an applicant for employment
with such agency.
(b) Additional Requests.--If a notice of lien is discovered
under subsection (a) with respect to an employee or applicant
for employment, the agency may--
(1) request that the employee or applicant execute
and submit a form authorizing the Secretary of the
Treasury to disclose to the head of the agency
information limited to describing whether--
(A) the employee or applicant has a seriously
delinquent tax debt; or
(B) there is a final administrative or
judicial determination that such employee or
applicant committed any act described under
section 7385(b); and
(2) request that the Secretary of the Treasury
disclose any information so authorized to be disclosed.
(c) Authorization Form.--The Secretary of the Treasury shall
make available to all agencies a standard form for the
authorization described in subsection (b)(1).
(d) Negative Consideration.--The head of an agency, in
considering an individual's application for employment or in
making an employee appraisal or evaluation, shall give negative
consideration to a refusal or failure to comply with a request
under subsection (b)(1).
Sec. 7384. Confidentiality
Neither the head nor any other employee of an agency may--
(1) use any information furnished under the
provisions of this subchapter for any purpose other
than the administration of this subchapter;
(2) make any publication whereby the information
furnished by or with respect to any particular
individual under this subchapter can be identified; or
(3) permit anyone who is not an employee of such
agency to examine or otherwise have access to any such
information.
Sec. 7385. Adverse actions for employees who understate taxes or fail
to file
(a) In General.--
(1) In general.--Subject to subsection (c) and
paragraph (2) of this subsection, the head of an agency
may take any personnel action against an employee of
such agency if there is a final administrative or
judicial determination that such employee committed any
act described under subsection (b).
(2) Personnel actions.--In paragraph (1), the term
``personnel action'' includes separation but does not
include administrative leave or any other type of paid
leave without duty or charge to leave.
(b) Acts.--The acts referred to under subsection (a)(1) are--
(1) willful failure to file any return of tax
required under the Internal Revenue Code of 1986,
unless such failure is due to reasonable cause and not
to willful neglect; or
(2) willful understatement of Federal tax liability,
unless such understatement is due to reasonable cause
and not to willful neglect.
(c) Procedure.--Under regulations prescribed by the Office of
Personnel Management, an employee subject to a personnel action
under this section shall be entitled to the procedures provided
under sections 7513 or 7543, as applicable.
* * * * * * *
MINORITY VIEWS
Committee Democrats oppose H.R. 1563, the Federal Employee
Tax Accountability Act of 2015, because it is based on ideology
rather than facts and will perpetuate a negative image of
federal workers.
This legislation seeks to solve a problem with federal
employee tax compliance that does not exist, a fact confirmed
by the Internal Revenue Service (IRS). Former Chairman Darrell
Issa conceded during markup of similar legislation in the 112th
Congress that a nearly identical bill was largely symbolic.
Federal employees, like all citizens, should pay their
federal taxes. Federal workers hold the public trust and should
be held to a high standard of conduct, which they have met and
exceeded.
The overwhelming majority of federal workers pay their
taxes fully and on time. IRS data indicate that federal
employees are far more compliant in paying taxes than the House
of Representatives and the U.S. population as a whole. As of
September 30, 2014, the delinquency rate for the overall
federal community, including active and retired civilian and
military personnel, was 3.12%.\1\ In comparison, the
delinquency rate for the House, including Members and
employees, was 5.04%. The general public's delinquency rate was
much higher at 8.7% in 2013, the latest statistic available.\2\
---------------------------------------------------------------------------
\1\Internal Revenue Service, Federal Employee/Retiree Delinquency
Initiative, Civilian/Military/Retiree Detail Report (Sept. 30, 2013);
Federal Employees and Retirees Owed $3.31B in Back Taxes at the End of
Fiscal 2013, Government Executive (May 23, 2014) (online at
www.govexec.com/management/2014/05/tax-delinquency-chart/85153/).
\2\Id.
---------------------------------------------------------------------------
The legislation is unnecessary because the IRS already has
adequate procedures in place to recover funds from federal
employees who are delinquent in paying taxes. The IRS can
impose continuous levies on federal salaries and annuities up
to 15% until the debt is paid through the Federal Payment Levy
Program. The IRS can also initiate additional levies in cases
when it determines that it is appropriate to do so.
Data from the IRS show that all federal employees who owe
taxes and do not qualify for financial hardship exemptions or
are not involved in bankruptcy, litigation, or pending offers
in compromise, are subject to having their wages levied. The
IRS confirmed that it does not have a problem collecting
delinquent taxes from federal employees.
Agencies already have authority to initiate disciplinary
action against employees for delinquent tax debts, which may
include removal, if necessary.
The legislation would make it more difficult to collect
unpaid taxes from federal employees by requiring their
termination and eliminating the ability to impose levies on
their federal salaries.
Implementation of the legislation would be burdensome and
costly. It would require agencies to conduct searches of
thousands of state and local databases for public notices of
liens. The Joint Committee on Taxation concluded that H.R. 249
would have ``negligible impact'' on revenue, and the
Congressional Budget Office concluded that it would have a net
cost for implementation.
Finally, the legislation raises serious privacy concerns.
It would provide agency personnel with access to employee tax
information without enforcement mechanisms to ensure
confidentiality.
For these reasons, Committee Democrats oppose H.R. 1563.
Elijah E. Cummings,
Ranking Member.
[all]