For over thirty years, I have represented citizens in matters with the Internal Revenue Service. Most Americans have an irrational fear of the IRS. Whether they pay very little in taxes or great amounts, they shudder with dread whenever they open a letter from the agency. This fear, of course, is part of what propels most taxpayers to turn over their hard-earned dollars to the government. But there appears to be one group of people who don’t seem to exhibit the same level of anxiety: our own federal employees.
The IRS just released its “deadbeat” statistics for the year and our employees owe us big time. Apparently, receiving higher compensation, better benefits, and a day off for every holiday including Lithuanian Independence Day is not good enough for some folks. In fact, as of 2010, there are 98,291 federal employees who owe us $1.034 billion. (That’s billion with a B.) This really shouldn’t surprise anyone since the number of federal employees who are also tax delinquents has been fairly consistent: about 100,000 over the last seven years. The problem is that during that period the amount owed has soared from $600 million to over $1 billion.
A breakdown of where these people work shows that virtually every department and agency contains tax scofflaws. The Treasury Department actually has fewer than 1% of its total employees delinquent – despite the fact that the head guy, Timothy Geithner, is a well-known tax delinquent. The worst department, with 3.89% of its staff owing money, is Housing and Urban Development. Of course, considering the state of the housing market, they clearly haven’t been doing too much, so perhaps we should wonder why we’re paying these people anything. At the U.S. Holocaust Memorial Museum, where I used to serve, almost 5% of the employees owe back taxes. The Presidential staff has 36 employees owing a total of $833,000 – that comes out to $23,000 per employee! One of the agencies with the highest percentage of flaky taxpayers is the U.S. Office of Government Ethics -- 6.5% of their employees are currently stiffing us. Which brings to mind two things: 1) there really is an Office of Government Ethics? And 2) it’s obvious that one of their guiding principles is not leading by example.
So what has the Congress been doing to rein in their employees who are tax chiselers? Not much, which is why the amount of money owed in back taxes continues to skyrocket. But finally, there is an effort to clamp down on this disgusting matter. Congressman Jason Chaffetz (R-Utah) has decided that the American people deserve better behavior from their employees.
Mr. Chaffetz is now in his second term, and in the majority. But his first term was spent in the minority, and, with Nancy Pelosi in charge of the House, a freshman Republican had less to do than the people in the Ethics office. Chaffetz tried something novel – he spent some of his time reading the documents that were sent to him. Apparently, he didn’t realize that most Congressmen don’t read much of anything – including the bills for which they vote. Eventually he came upon the annual report of tax delinquents; and, given his prior experience as a private citizen, he immediately suspected something fishy. When he investigated the issue, he found that nobody in Congress cared enough to put a stop to this. Chaffetz knew that Pelosi was far more concerned with sticking it to the taxpayers of America than collecting the taxes on her own employees, so he waited until the Republicans took over the House.
He now has introduced a bill that gives every department the authority to terminate employees who don’t pay their taxes. When I asked him why the bill doesn’t require the employee to be fired, he replied that the Democrats would never agree to that, principally because they were concerned that key people might be among the debtors. I then wondered aloud whether federal workers could then say “You can’t fire me or make me pay my taxes because I am too important.”
The bill is structured on IRS rules put in place in 1998 – mainly because the IRS itself used to have a large number of non-payers. Once they instituted a rule that employees could be fired, the number of tax cheats dropped by 90%. Apparently, the fear of having to find real job in the private sector was so dreadful that they paid up.
The bill has been voted out of sub-committee and Senator Tom Coburn (R-OK) has authored a similar bill in the Senate. Maybe the Undertaker (Harry Reid) will allow this to be one of the three or four pieces of legislation he lets come to the floor this year.
Many Americans probably never thought a problem like this could exist. Then again, if you’re a true cynic, you knew it would happen. But here’s some advice: whenever you have the pleasure of interacting with one of our fine federal employees, you might want to check whether they are late on their taxes before answering any questions.