Tags: irs | contractors | millions | debts

IRS Contractors Rack Up $5.4 Million in Tax Debts

Thursday, 24 Oct 2013 02:03 PM

By Dan Weil

Hundreds of Internal Revenue Service contract employees owe $5.4 million in back taxes, according to a new federal audit.

The Treasury Department’s inspector general for tax administration said that 691 IRS contract workers, or about 5 percent of the contractors it investigated, owe the money.

At least 352 of the tax delinquents didn’t even have a payment plan established, which should have disqualified them from access to IRS facilities, the report says.

And 319 were in good standing when they started work, but have since slipped into arrears, the report states. "Under IRS policy, these 319 contractor employees were not eligible for staff-like access and should not have had access to IRS facilities, systems, and data."

The report says five contractors either didn't file tax returns or filed them late "but were still granted staff-like access." Another 13 were in good standing when they got the job but have since either filed late or not at all.

“Because many contractor employees have access to sensitive IRS systems and facilities, the IRS should address tax non-compliance for these employees in a similar manner as it would for its own employees,” Russell George, the tax administration inspector general, said in a statement reported by The Hill.

George said the IRS oversees its own employees’ tax situations much more closely than contractors. The agency follows up on the tax status of contractors only once every five years, the report said.

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