Good News: The IRS Awarded Contracts To Companies That Owed Taxes

Matt Vespa | June 24, 2015 6:15 PM

The IRS has been dealing with something of a public relations nightmare, though the right has shown their disgust with more intensity with the agency that’s been accused of targeting conservative groups. Now, the Treasury Inspector General for Tax Administration (TIGTA) released a report showing that the IRS awarded nearly $19 million in contracts to 17 companies, even though these entities owed the federal government back taxes. There is a “statutory prohibition” from conducting business with corporate entities that owe taxes, according to a statement released by TIGTA. The contracts were drafted between 2012 and 2013.

Beginning with Fiscal Year (FY) 2012, Federal law has prohibited the IRS from using appropriated funds to enter into a contract with a corporation that has certain Federal tax debt and/or felony convictions, unless the Department of the Treasury Suspension and Debarment official has considered suspending or debarring the corporation.

TIGTA reviewed whether the IRS had well-designed and effective management controls in place over the use of FYs 2012 and 2013 appropriated funds to implement the requirements of the Federal law that prohibited the award of contracts to corporations with certain Federal tax liabilities. The Consolidated Appropriations Act of 2012 also prohibited the IRS from using appropriated funds to enter into a contract with any corporation that was convicted or had an officer or agent of such corporation acting on behalf of the corporation convicted of a felony criminal violation under any Federal law within the preceding 24 months.

TIGTA found that the IRS did not have effective controls in place to prevent the award of contracts to corporations with certain Federal tax debt and/or felony convictions. TIGTA identified 17 corporations that were awarded a total of 57 contracts valued at about $18.8 million during FYs 2012 and 2013, while the corporations had Federal tax debt.

In addition, TIGTA found that the IRS did not follow the Department of the Treasury requirement to insert specific language in solicitations requiring corporations to assert whether or not they have certain Federal tax debt and/or felony convictions. Based on a statistical sample of contracts awarded in FYs 2012 and 2013, TIGTA found that the IRS did not require corporations to self-certify prior to contract award, as required, for any of the 143 sample cases.

Curtis Kalin, spokesperson for Citizens Against Government Waste, told Townhall, “this report is another serious red flag for the IRS,” and that “It’s sadly ironic that the very government agency that expects taxpayers to follow extensive rules and regulations fails to adequately prevent themselves from violating federal statutes.”

You can read the full report here.

It’s just another day, with another story about government malfeasance.