Are you eligible for federal employment if you owe taxes?

Legislation Pending to Require Higher Tax Accountability for Federal Employees

On July 31, 2012, the United States House of Representatives passed H.R. 828, also known as the “Federal Employee Tax Accountability Act of 2012”, by a majority of 263 to 114. It has since been referred to the United States Senate where it has been read twice and further referred to the Committee on Homeland Security and Governmental Affairs.

The bill, if enacted, looks to limit eligibility of delinquent taxpayers to be employed by the federal government, including delinquent taxpayers that are discernible as those taxpayers who have an outstanding tax debt and have had a notice of lien filed against them in public record. This includes both those seeking employment and those currently employed by an “agency” as defined in § 7381 (3) of the bill to include Executive Agencies, United States Postal Service, the Postal Regulatory Commission and employing authorities in the legislative branch. The bill allows for exceptions, some of which are:

  • Debts being paid in accordance to a payment arrangement or offer-in-compromise
  • Debts which currently have a collection due process hearing or relief, requested or pending
  • Debts granted relief

These exceptions, along with the fact that several members of Congress have, or have had, delinquent tax problems, exemplify what I have advised people for decades:

The taxing authorities of the United States understand that certain life events happen that create a situation where an individual or business owes a tax they cannot pay. The Internal Revenue Service is not in the business of making life more difficult for those who are remedying the situation and do not consciously or routinely shirk their tax payment obligations.

What this bill does aim to do is add corollary consequences (employment) for those who are shirking their tax payment duties. These corollary consequences are in addition to civil and criminal consequences provided for by the U.S. Tax Code and IRS regulations.

While this bill has not yet been enacted, persons with tax debt currently employed by a United States Government agency or seeking to be employed by a government agency should examine options available to settle any tax liability. Meeting with a tax attorney can illuminate the best path forward to manage tax obligations.

We strongly encourage taxpayers to learn your rights and solutions to your tax debt problems. You can learn more information about tax debt collection resolution and other tax related information on our website or call us for more information.

Moskowitz LLP, A Tax Law Firm, Disclaimer: Because of the generality of this blog post, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Prior results do not guarantee a similar outcome. Furthermore, in accordance with Treasury Regulation Circular 230, we inform you that any tax advice contained in this communication was not intended or written to be used, and cannot be used, for the purposes of (i) avoiding tax related penalties under the Internal Revenue Code, or (ii.) promoting, marketing, or recommending to another party any tax related matter addressed herein.