The IRS awarded nearly $19 million in contracts to 17 corporations that owe back taxes in 2012 and 2013 despite a provision of law prohibiting it, according to a Treasury Inspector General for Tax Administration report.
Starting with the 2012 appropriations law covering the IRS, the agency has been barred from entering contracts with companies with certain tax debt and/or felony convictions. It also prohibited the IRS from using appropriated funds to enter into a contract with any corporation that was convicted or had an officer or agent of such corporation acting on behalf of the corporation convicted of a felony criminal violation under any federal law within the preceding 24 months.
The IG review focused on what management controls the IRS has in place to enforce those provisions but found that the controls were not sufficient to prevent such awards in those cases. It also concluded that the IRS did not follow the Department of the Treasury requirement to insert specific language in solicitations requiring corporations to assert whether or not they have certain federal tax debt and/or felony convictions. Based on a statistical sample of contracts awarded in FYs 2012 and 2013, TIGTA found that the IRS did not require corporations to self-certify prior to contract award, as required, for any of the 143 sample cases, it said.
The IRS said it plans to conduct training for its contracting officials and monitoring contract actions, although it said it believes it was appropriate to award the contracts at issue.
