Rep. Jason Chaffetz (R-Utah) plans to reintroduce his bill to hold federal employees and contractors more accountable for not paying their federal taxes.
But the House Oversight and Government Reform chairman may want to rethink his plans after his fellow committee members heard of a potential better approach.
Rep. Mick Mulvaney (R-S.C.) asked Wednesday during a Government Operations Subcommittee hearing whether the model the IRS uses would be enough to hold employees and contractors accountable.
“Treasury seems to have it down. The delinquency rate is well below 2 percent, roughly a third of what the average is across the other agencies. You are doing it without the heavy hand of Congress,” he said. “And it strikes me that the rules you put in place might actually work.”
The one thing that is different for the IRS is it can access private information about its employees. Federal law, known as 6103 authority, prohibits any other agency or private sector company besides the IRS from accessing tax records to find out if an employee is delinquent on paying their taxes.
“They administer the tax code and it’s been a tradition there for as long as I’m aware since the IRS existed they were able to look into their own employees’ tax compliance as they administer the code,” said Maureen Gilman, legislative and political director for the National Treasury Employees Union during the hearing.
Gilman said the IRS also has more stringent rules for its employees, including conduct requirements that if violated could mean the loss of their job.
Gilman said additional provisions in the tax code known as the “10 deadly sins” involved termination for the “willing and knowing violation of tax rules.”
She said it’s not just about non-payment, but violations such as not filing returns or under reporting your income.
“Whether or not your ability to pay is not a part of that when it’s considered if you face termination or not,” Gilman said.
Chaffetz continues to push his bill that in the past would let agencies fire federal employees for not paying their taxes and prohibit the hiring of those who have a “serious” tax burden.
The IRS reported in March 2013 that the number of federal employees and retirees who owe taxes jumped by 12 percent in 2011 to nearly 312,000 who owe more than $3.5 billion.
Rep. David Rouzer (R-N.C.) introduced another bill related but not nearly the same as Roberts’ on March 2.
The No Hires for the Delinquent IRS Act would focus only on IRS. The bill would prohibit the IRS from hiring new employees until the Treasury Secretary certifies that the bureau doesn’t employ any individual with a “serious” tax debt.
Rep. Mark Meadows (R-N.C.) the subcommittee chairman, asked the panelists to come back to the committee with recommendations besides legislation to improve the accountability process to ensure federal employees and contractors pay their taxes.
Gilman said other options could be to adequately resource the Federal Payment Levy Program (FPLP), which Congress created in 1997 to recover taxes owed by federal employee who become delinquent. The program lets the IRS take up to 15 percent of certain payments to cover tax bills from employees. She said the FPLP has been successful for almost the last 20 years.
“If legislation is pursued that would prohibit federal employment for those with tax debt, we believe it’s critically important to include exemptions similar to those in the FPLP, especially a hardship exemption that represents a consistent and transparent standard as well as a notice and grace period for those working earnestly to resolve their debts,” she said. “NTEU believes that intent should be a consideration when determining whether a federal employee should be terminated due to tax delinquency. We also believe the ability to pay also should be a consideration.”