Government Worker Tax Law

U.S. government workers may be placing their jobs in jeopardy if they fall behind on their federal taxes.

Following previously failed attempts, legislation is being revived again in Washington that would prevent “seriously delinquent” taxpayers from federal employment.

In May, a Senate committee approved a bill – introduced by Sen. Tom Coburn (R-Oklahoma) and cosponsored by Sen. Mark Pryor (D-Arkansas) – that would require prospective and current federal government workers to remain reasonably in compliance with their tax obligations.

Failure to do so could result in the loss of their jobs, and for prospective applicants, being barred from employment.

The measure applies to executive and legislative branch workers, as well as employees with the U.S. Postal Service.

In 2011, nearly 108,000 civilian federal workers, of the nearly three million on the payroll, had an unresolved federal income tax delinquency, either for owing a balance to the IRS or because they did not file a federal tax return, according to IRS records. Together, federal workers owed $1 billion in unpaid taxes.

Of the 9.8 million active civilian and military employees and retirees in 2011 either receiving a paycheck or some form of benefits, nearly 312,000 were behind on their tax obligations. Collectively, this amounted to a balance owed of $3.5 billion to the IRS, the records indicated. The numbers do not include U.S. government employees who have entered into agreements with the IRS to catch up on their taxes.

While it remains to be seen whether this bill will make it through Congress and be signed by President Obama, one of the bill’s sponsors, Sen. Coburn, has expressed his laundry list of concerns as to why it should become law.

Critics say it unfairly targets federal workers and that is it particularly punitive especially when they have faced repeated rounds of economic insecurity over the years, which included being subjected to furloughs and pay freezes as Congress continues to deadlock on major issues and appropriations.

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