Thousands of civilian agency contractors are getting away
with tax abuses, the Government Accountability Office has
said in a new report.
It said abuses by Defense contractors have led to concerns
at other agencies, and that records from the Internal
Revenue Service and Financial Management Service show that
about 33,000 civilian contractors owed more than $3 billion
in taxes as of September 30, 2004.
It said only a fraction of unpaid taxes and a portion of
FMS payments were included in the levy program and that
FMS only collected $16 million.
“About $171 billion of unpaid federal taxes was not sent
to the levy program to be offset against payments because
of statutory requirements or IRS policy exclusions such as
claims of financial hardship or bankruptcy,” according to
GAO-05-683T.
Further, “FMS did not proactively manage and oversee the
levy program,” the report said, citing “tens of billions of
dollars in federal payments” that were not matched against
debts for potential levy.