Tuesday, May 24, 2011

Tax Deadbeats Get Recovery Funds, Congress Could Fix but Won't.

In a post 3 1/2 years ago HERE I pointed out that contractors with unpaid tax obligations had received millions in Medicaid reimbursements because Congress had not authorized the witholding of those payments. 

Yesterday HERE the GAO reported that Recovery Act contractors also had millions in unpaid federal tax obligations, and I am sure that some in Congress will report that they are "shocked" by this news.  

If they actually read the report response from the Recovery Board they should not be shocked:
The issue of federal money being awarded to federal tax delinquents is longstanding and has been examined by GAO for more than a decade. As a result, the Recovery Board encourages GAO to make recommendations on ways Congress or the administration could prevent those with delinquent federal tax debt from obtaining federal awards through contracts, grants or other assistance. As GAO states, federal law does not prohibit a contractor with unpaid federal taxes from receiving contracts from the government. Similarly, federal regulations do not require contracting officers to specifically consider tax delinquencies when determining whether an entity is responsible to do business with the government unless it was specifically suspended or debarred for certain actions, such as tax evasion. Additionally, there are no laws or government wide policies that prohibit the award of grants or other federal assistance to applicants with unpaid federal taxes.
Shouldn't any form of tax reform require that after a phase in period ALL government contractors and recipients of [non means tested] federal assistance MUST be current on any unpaid federal tax obligations? Put more plainly, the policy could be stated as "If you Owe, No Federal Dough".

Originally created and posted on the Oregon Housing Blog.

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