More than 571,000 current and retired federal employees owe $6.3 billion in taxes, a delinquency rate that has been steadily increasing despite IRS enforcement notices.
The House Oversight and Government Reform Committee wants to know why the IRS and other federal agencies have not cracked down harder on tax scofflaws within their ranks or moved to seize their wages and pensions through an existing enforcement program.
In a letter sent Thursday to IRS Chief Executive Officer Frank J. Bisignano, the Republican-led committee asked the agency to turn over data showing the IRS’s efforts to recover unpaid taxes, whether it had used wage and pension garnishment, and whether it had been successful at bringing any of the money into the Treasury.
A recent report by the Treasury Inspector General for Tax Administration paints a bleak picture of enforcement against federal workers.
It found that the number of federal employees delinquent on their taxes had increased by an alarming 43% since 2021 and that 215,000 U.S. government workers, or 6.9% of the total workforce, were delinquent on their federal taxes in 2024 alone.
The report found that 50,000 federal employees and retirees failed to file any tax returns, among them 14,000 repeat non-filers who earned federal salaries of $100,000 or more. At least 122 federal workers did not file a tax return for eight or more years, the inspector general found. A third of all non-filers were U.S. Postal Service workers.
Committee Chairman James Comer, Kentucky Republican, plans to crack down on the federal government’s apparent lack of enforcement.
“With TIGTA’s report showing continuous increases in tax noncompliance among current and former federal employees, the Committee is concerned that this trend will continue unless IRS, the Executive Branch and Congress act now to proactively curb noncompliance with federal tax laws,” Mr. Comer wrote to Mr. Bisignano.
Failure to file a tax return is a federal crime, but IRS efforts to enforce the law among federal workers have largely failed.
Last summer, the IRS mailed 427,000 delinquency notification letters to federal employees and retirees that Mr. Comer said encouraged the scofflaws to voluntarily resolve their outstanding tax bills.
Within a month of receiving the letters, only 59,000 recipients made a payment, and just 4,700 paid all the taxes they owed.
In total, the IRS recovered only $58 million in delinquent tax payments from the federal workforce, which is less than 1% of the total owed by all federal workers and retirees.
“This data demonstrates that the majority of noncompliant federal employees ignored the IRS letters and failed to resolve their tax liabilities in a timely manner or at all,” Mr. Comer wrote.
The federal government has enforcement avenues beyond sending friendly letters encouraging compliance.
The Federal Payment Levy Program authorizes the IRS to garnish up to 15% of federal employee salaries and retiree pensions to recover unpaid taxes.
Mr. Comer asked the IRS to turn over the number of non-filers referred to the Federal Payment Levy Program and the amount of tax money recovered through that program, the number of wage garnishment requests for unpaid taxes made to the Bureau of Fiscal Service, and the number of employees and pensioners “who had federal payments or salaries levied.”
Mr. Comer asked the IRS to turn over the data by July 9 and to agree to a staff-level briefing on IRS enforcement of federal workers’ tax compliance.
Under the law, the Treasury Department can hold its employees accountable for tax delinquencies. The report said that was probably a factor in the department’s relatively low delinquency rate of 2.4%.
The law, however, prohibits the IRS from sharing tax information outside the Treasury, so other departments struggle to crack down on workers who evade paying their federal taxes.
The loophole leads to weak enforcement, according to Mr. Comer.
“It seems unlikely that employees who are already failing to pay or to file taxes for years in violation of federal laws would voluntarily identify themselves to their employing agencies,” Mr. Comer said.
• Stephen Dinan contributed to this report.
Contact the author
Please read our comment policy before commenting.