Federal Employees Set Poor Example, Owe $3.3 Billion in Back Taxes

The Internal Revenue Service (IRS) published data this week showing that employees of the federal government owe more than $3.3 billion in back taxes.

The IRS numbers showed that over 318,000 federal employees owe unpaid taxes to the federal government.  The number of federal employees owing back taxes is approximately 3.2 percent of the almost 10 million federal employees and represents a 2 percent increase as compared to the previous year.

With the total unpaid tax bill at just over $3.3 billion, the numbers indicate each federal employee owing back taxes owes on average just shy of $10,400 to the IRS.

The unpaid tax liability could stem from those who could not pay their tax liabilities when they were due or who were identified through an IRS audit as owing more taxes than they paid originally.

A spokesperson for the IRS indicated they pursue the collection of unpaid tax liabilities from federal employees in the same manner and rigor as they do for other residents of the United States.

Small Government Agencies Have Highest Rate of Back Taxes

The IRS data broke down the federal employees owing back taxes by the areas of government where they work.  Several smaller federal agencies had the highest percent of employee who had not paid all of their tax bills on time.

The National Council on Disability had the highest rate of non-payment of back taxes of any agency, with just over 11.5 percent of employees owing at least some money to the IRS.  Approximately 10 percent of employees of the Committee for Purchase from People Who Are Blind owe back taxes, as do approximately 9.5 percent of employees of the Civil Rights Commission.

More widely-known branches of the government were not exempt from the IRS data either.  Approximately 4.9 percent of employees of the House of Representatives owe back taxes, whereas only 3.25 percent of employees of the Senate owe back taxes.  Just over 2 percent of the President’s Executive Office have unpaid taxes.

The lowest rate of unpaid taxes is by employees of the Department of the Treasury, with a rate of only 1.2 percent.  However, the Department of the Treasury has been criticized in recent weeks for paying over $1 million in bonuses to 1,100 employees who were delinquent on paying their tax bills or who had intentionally understated their income on their federal income tax returns.

IRS officials have indicated they are negotiating with union representatives for the non-payment of bonuses to employees who are delinquent on the payment of their tax bills.

Although the IRS data broke down the rates of non-payment of taxes by federal agency, it did not identify specific individuals who owe back taxes.  Therefore, it is not clear if Congressman are among those with unpaid tax liabilities.

The IRS data did not specify what percent of employees of the IRS are delinquent on paying their taxes.

Despite the number of federal employees with unpaid taxes, the rate is less than half that of the average taxpayer.  Approximately 8.7 percent of the population owes unpaid taxes to the IRS.

Media outlets obtained the IRS data through the Freedom of Information Act.

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by Mark Johnston

Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.