Tax Delinquency | The Contracting Education Academy

February 26, 2016 By AMK

Effective today, COs prohibited from making awards to companies with felonies or delinquent taxes

The Federal Acquisition Regulation has been updated to “prohibit the Federal Government from entering into a contract with any corporation having a delinquent Federal tax liability or a felony conviction under any Federal law, unless the agency has considered suspension or debarment of the corporation and has made a determination that this further action is not necessary to protect the interests of the Government.”

This rule takes effect February 26, 2016.

Contractors responding to federal solicitations are now required to state in their offers to the government whether they are a corporation with: 1) a delinquent federal tax liability or 2) a felony conviction under federal law. When an offeror provides “an affirmative response” in connection with either of these representations, the contracting officer (CO) is required to request additional information from the offeror and to notify the “agency official responsible for initiating debarment or suspension action.”

The new rule further provides that the contracting officer “shall not make an award to the corporation unless an agency suspending or debarring official has considered suspension or debarment of the corporation and determined that this further action is not necessary to protect the interests of the Government.”

The implementing clause can be found at FAR 52.209-5 – Certification Regarding Responsibility Matters.

July 15, 2015 By AMK

IRS awarding millions in contracts to businesses with federal tax debt

The Internal Revenue Service awarded millions of dollars in contracts to corporations with substantial federal tax debt, says a March 26 Treasury Inspector General for Tax Administration, or TIGTA, report that was released last week.

Beginning in fiscal 2012, federal law was enacted prohibiting the IRS from doing business with companies who had federal tax debt.

“Federal tax debt conveys a contradictory message in relation to the IRS’s mission to ensure compliance with the tax laws,” the report says.

But TIGTA found that the IRS awarded 57 contracts valued at nearly $19 million to 17 corporations who owed federal taxes during fiscal 2012 and fiscal 2013, the report says.

Keep reading this article at: http://www.fiercegovernment.com/story/tigta-irs-awarding-millions-contracts-businesses-federal-tax-debt/2015-06-29

April 7, 2015 By AMK

Congress wants contractors to pay their taxes — here’s how

A new bill introduced last week is the latest attempt to prevent tax delinquents from winning federal contracts — or competing for government work at all.

This is the second bill attempting to force contractors to pay their taxes — a nearly identical bill was introduced in the last Congress. It comes despite existing acquisition provisions that require contractors to disclose any tax debts before they bid for work.

“Legislation that codifies, clarifies, and offers minimally invasive improvements to the Federal Acquisition Regulation could be beneficial,” said Alan Chvotkin, executive vice president and general counsel at the Professional Services Council, in testimony submitted for a hearing before the House Committee on Oversight and Government Reform’s government operations panel. “However, such legislation must be tailored carefully to avoid creating new challenges or points of confusion.”

In a nutshell, the latest bill states that any executive agency issuing a solicitation for a contract in an amount greater than the simplified acquisition threshold — currently $150,000 — must require all offerors to certify they have no so-called seriously delinquent tax debt. They also must authorize the Treasury Department to disclose information about that seriously delinquent tax debt.

Keep reading this article at: http://www.bizjournals.com/washington/blog/fedbiz_daily/2015/03/the-hill-wants-to-get-governmentcontractors-to-pay.html?page=all

December 30, 2013 By AMK

Vendors doing business with IRS owe nearly $600M in back taxes

Some 1,168 businesses that sell products and services to the Internal Revenue Service owe a combined $589 million in delinquent taxes, auditors found.

Federal law — as updated in the 2012 Consolidated Appropriations Act — forbids agencies from signing contracts with companies with unpaid federal tax liabilities, but the IRS’ system of controls, while effective much of the time, is not fool-proof, according to the report released Wednesday by the Treasury Inspector General for Tax Administration.

“When the IRS conducts business with vendors that do not comply with federal tax laws, it conveys a contradictory message in relation to its mission to ensure compliance with the tax laws,” said J. Russell George, Treasury Inspector General for Tax Administration.

The IRS in the past has resisted TIGTA’s recommendation that it conduct an annual check on contractor tax records. And though the agency’s use of its Master Vendor File is generally effective, auditors recently found that the IRS has not checked the General Services Administration’s Excluded Parties List System. The agency improperly awarded four new contracts or exercised additional option years on existing contracts, valued at $2.6 million, to three vendors that were suspended from doing business with the government, the auditors found.

Keep reading this article at: http://www.govexec.com/contracting/2013/12/vendors-doing-business-irs-owe-nearly-600m-back-taxes/75665

May 4, 2012 By AMK

Pentagon defends approach to tax-delinquent contractors

The Defense Department’s current procedures for deciding whether to crack down on contractors that owe back taxes is working as intended, Frank Kendall, acting Defense undersecretary for acquisitions, logistics and technology, said in a newly released response to inquiries from lawmakers.

Sens. Tom Carper, D-Del., and Tom Coburn, R-Okla., wrote to Kendall asking if the Pentagon was withholding any payments from Leonie Industries — the largest U.S. contractor working in Afghanistan- – after USAToday reported in February that the firm owed about $4 million in back taxes.

Keep reading this article at: http://www.govexec.com/contracting/2012/04/pentagon-defends-approach-tax-delinquent-contractors/41791.

The Internal Revenue Service awarded millions of dollars in contracts to corporations with substantial federal tax debt, says a March 26 Treasury Inspector General for Tax Administration, or TIGTA, report that was released last week.

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