On Monday, millions of individuals and companies filed their 2010 tax returns. Some of these individuals and companies have fallen behind on their tax payments. The reasons for falling behind vary—some have simply fallen on hard times and cannot pay, while others thumb their noses at the tax laws in a bold game of “Catch Me if You Can.”
However, with the size of the country’s deficit in the news almost every day recently, the Government is looking to get its money however it can. One proposed effort is aimed at government contractors and seeks to ensure that no grants or government contracts are awarded to individuals or entities with serious tax delinquencies.
Last week, the House Committee on Oversight and Government Reform recommend that H.R. 829, the Contracting and Tax Accountability Act of 2011, be considered by the entire House of Representatives. If the Bill becomes law as written, it will prevent individuals and companies with a “seriously delinquent tax debt” from receiving a federal government contract or grant. The Bill defines a “seriously delinquent tax debt” as “an outstanding debt under the Internal Revenue Code of 1986 for which a notice of lien has been filed in public records pursuant to section 6323 of such Code.” The Bill also requires amendments to the FAR to implement its provisions.
There is still a long way to go before becoming law, but contractors with seriously delinquent tax debts should consider addressing their tax issues sooner rather than later.