Grassley Welcomes President’s Interest in Stopping Tax-delinquent Companies from Getting Federal Contracts
On December 14, right after a story about federal employees not paying their taxes, Senator Chuck Grassley asked the commissioner of the Internal Revenue Service about unpaid taxes by government contractors who receive hundreds of billions of dollars every year in payments from Medicare and Medicaid. Senator Grassley’s letter was based on reports from the Government Accountability Office in 2008 and earlier that these contractors owe more than $1 billion in unpaid taxes each year, including the payroll taxes used to fund Medicare and Medicaid.
On December 15, Grassley said, “These reports raise a tax fairness issue. It’s not right for a few to shirk their obligations. It’s especially offensive that tax delinquencies come from federal employees and contractors. I’ve asked the IRS for an accounting of what the agency is doing to collect these taxes and to coordinate enforcement efforts with the federal agency that runs the Medicare and Medicaid programs.”
Grassley’s work to stop the awarding of federal contracts to companies that don’t pay their U.S. taxes dates to 2002, when he revealed that several companies that created phony foreign “headquarters” to escape U.S. taxes also enjoyed lucrative federal contracts. He introduced legislation to bar such companies from getting federal contracts.
Grassley made the following comment on today’s announcement by the President to crack down on tax evaders who get federal contracts:
“This crackdown is the right thing to do. It’s a matter of fairness, and it’s especially offensive that contractors who make money from tax dollars are delinquent in paying their own taxes. I’ve worked on this issue for a long time, including asking the President’s nominees about it, so it’s good to see the President express interest. So far, the IRS says it’s still working on my latest inquiry of December 14 on unpaid taxes for government contractors. I’ve been told I’ll get some information if I get the committee chairman involved to get access to certain materials. So it remains to be seen whether today’s announcement will produce the results that the President intends. He has a lot of follow-up work ahead.
“I also hope the President will follow up on the problem of federal employees not paying their taxes. Everybody should pay what they owe, federal employees and contractors included.”
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