Federal Employee Tax Accountability Act of 2012
Floor Speech
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Mr. CHAFFETZ. I yield myself such time as I may consume.
Mr. Speaker, almost every Federal employee that I have run into, they're good, hardworking, patriotic people trying to do the right thing; but unfortunately we have a few that really aren't doing the right thing.
I want to highlight a problem that we see out there. There are those Federal employees that are delinquent on their Federal taxes. Now, this becomes egregious, I think, because of the nature of their employment--they're working for the Federal Government, they're being paid by the Federal taxpayers, and yet they're not paying their own Federal taxes.
Unfortunately, over the course of time this situation has not gotten better. People are dealing with very difficult situations, they have adopted something or somehow in their life they've gotten upside down. The nature and the spirit of this bill, the bill that I am the chief sponsor on, is to find those people who are trying to do the right thing--they're trying to rectify it, they're trying to come up with a plan--we're not going after those people. But for the other group of people who are just totally ignoring the law and they're not living up to their obligation, they're not paying their Federal taxes, there ought to be more of a consequence.
The number of delinquent employees has remained fairly consistent since the year 2004. Remarkably, there were 102,794 employees who were delinquent with their Federal taxes back in 2004. Fast forward to 2010, that number is still 98,291. In fact, nearly 700 people on Capitol Hill are delinquent on their Federal taxes. Unfortunately, the dollar amount of these delinquencies from 2004, which was $599.8 million, has grown to over $1 billion--in fact, it's $1.034 billion unpaid taxes from Federal employees.
So, employees who consciously ignore the channels and processes in place to fulfill their tax obligations must be held accountable. The Federal Employee Tax Accountability Act addresses noncompliance with our tax laws by prohibiting individuals with seriously delinquent tax debt from Federal civilian employment. This should be common sense, and I hope it's bipartisan.
Most taxpayers, including government employees, file accurate tax returns and pay the taxes they owe on time, regardless of their income. Federal employees and individuals applying for Federal employment should do the same--always.
In 2010, the most recent year for which the IRS data is available, more than 98,000 civilian Federal employees owed more than $1 billion in taxes. The average delinquency rate for Federal civilian employees was 3.33 percent, up from 2.29 percent in 2008.
The vast majority of Federal workers who owe taxes owe them from income that they earned. The intent of this bill is simple. If you're a Federal employee or an applicant for Federal employment, you should be making a good faith effort to pay your taxes or to dispute them, as taxpayers have the right to do.
Under this bill, H.R. 828, individuals having seriously delinquent tax debts are ineligible for Federal civilian employment in the executive and legislative branch. ``Serious tax delinquent'' is defined as an outstanding Federal debt for which the notice of lien has been filed publicly.
H.R. 828 exempts employees who are working to settle tax liabilities by excluding Federal tax debts that are being paid in accordance with an installment agreement, offer of compromise, or wage garnishment; for which a due process hearing or request for relief from joint and several liability is requested or pending; or for which relief has been granted. So, there are exceptions. We're not trying to cut somebody off at the knees if they're trying to do the right thing.
The bill requires individuals applying for Federal jobs to certify that they are not seriously delinquent in their taxes. Agencies will also conduct periodic reviews of public records for tax liens. And individuals with seriously delinquent tax debt may avail themselves of existing due process rights, including before the Merit Systems Protection Board. In addition, individuals will have 6 months to demonstrate that their tax debt is not ``seriously delinquent.''
The bill also provides a financial hardship exemption for employees. Federal employees are called to account for paying taxes by the code of ethics for the executive branch. The code of ethics dictates that Federal employees must ``satisfy in good faith their obligations as citizens, including all just financial obligations, especially those such as Federal, State or local taxes that are imposed by law.'' Thus, the necessity of this situation. Unfortunately, it's getting worse, it's not getting better.
We have an obligation, I think, to the American taxpayers and to the overwhelming majority, the 96-plus percent of Federal workers, who are doing the right thing. Thus, I urge the adoption of this bill.
I reserve the balance of my time.
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Mr. CHAFFETZ. Mr. Speaker, I yield myself such time as I may consume.
There is a need for this. I wish there wasn't a need for this. There are other more pressing things that we should be focused on. But this is $1 billion in uncollected taxes, taxes that are due by Federal workers.
Again, I don't want to disparage the reputation of all Federal employees, but this small group--in excess now of 3 percent of our Federal workers--is putting tarnishment on those other employees.
I want to point to a January 23, 2012, Federal Eye article--Ed O'Keefe is the author. Let me read a paragraph from his article. He said:
But on Capitol Hill, 684 employees, or almost 4 percent, of the 18,000 congressional staffers owed taxes in 2010, a jump of 46 workers from 2009. Four percent of House staffers owed $8.5 million, and 3 percent of Senate employees owed $2.1 million, the IRS said.
We actually get a report from the IRS, and it has a breakdown of the number of employees by department who aren't paying their Federal taxes. The Department of Treasury, they have one of the lowest percentages. Less than 1 percent of their employees don't pay their taxes, but they still have 1,181 employees at the Department of Treasury who aren't paying it. There's an uncollected $9.3 million.
At the Federal Reserve, the Board of Governors, smaller in terms of their numbers, but you still had 91 employees at the Federal Reserve not paying their taxes--4.86 percent of their employees not paying over $1.2 million in taxes.
If you go on and look here, this one is my personal favorite. The U.S. Office of Government Ethics has the worst compliance rate of our Federal workers. If you put that in a movie, you wouldn't believe it. But nearly 6.5 percent of their employees don't pay their Federal taxes, the U.S. Office of Government Ethics.
Unfortunately, there is a need for this.
I would like to highlight, we did this in a very bipartisan way within committee. There was an amendment offered by Mr. Lynch of Massachusetts, who I have the greatest respect for. He offered an amendment. We accepted that. When we accepted that, he was quoted as saying, and I quote from Mr. Lynch:
With that refinement here, a friendly amendment, I certainly would vote for the bill if the amendment were included.
I hope we can do this in a bipartisan way. We have an obligation, a duty to do this.
I reserve the balance of my time, Mr. Speaker.
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Mr. CHAFFETZ. Mr. Speaker, let me say, in conclusion here, look, if Federal workers aren't paying their Federal taxes, they should be fired. If they're not paying their Federal taxes and they want employment here, they should not be employed as Federal workers.
We have a duty and an obligation. This is a billion dollar problem in search of a solution. This is the solution. We should do so in a bipartisan way.
And with that, I urge the adoption of this bill.
I yield back the balance of my time.
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