Government Rewards Scofflaws
|January 9, 2007||Posted by Staff under Archive, Progress Report, The Progress Report|
US Govt Pays Those Who Defraud It
Taxpayers for Common Sense is the best organization that monitors excessive government spending, corruption and corporate welfare. Here is their latest news update.
FEDS PAY TAX SCOFFLAWS Billions of dollars flow from the federal coffers each year to thousands of companies and individuals who dont pay their taxes, according to a new government report.
More than 70,000 companies and individuals who owed over $1 billion in taxes received nearly $2 billion in federal payments last year, according to the General Accounting Office (GAO) report. The federal government could recover at least $270 million in delinquent taxes annually if these payments were included in a tax levy program.
Currently, the IRS can levy up to 15% of federal payments made to delinquent taxpayers through the Taxpayer Relief Act of 1997. The agency cross-references federal payment data with information on overdue taxes to identify payments that can be garnisheed to recover money owed to the federal government.
But numerous agencies are still not part of this levy program. The United States Postal Service, Department of Defense and Centers for Medicaid and Medicare currently dont levy payments made by their respective agencies. In all, nearly $900 billion in federal payments are not subject to the program, according to the GAO.
Broadening the levy program could help the government recover even more. The GAO did not receive data for more than 50 percent of the Medicare vendor payments and were unable to match about $3.4 billion in Department of Defense vendor payments against IRS accounts.
IRS officials could collect millions more by going after companies that use more than one name. Six hundred fifty-six of the 1226 companies reviewed in the report used several names to evade paying taxes.
While the IRS has effectively used its authority to go after individual taxpayers through the levy of federal salaries and retirement benefits, the IRS uses its authority much less often when dealing with companies. The Department of Defense and other agencies have databases that could assist the IRS with obtaining current information about vendor payments, but the IRS hasnt requested this information, which is essential to recovering money owed to the federal government.
The current levy system leads to unfair treatment of delinquent taxpayers depending on where they receive federal payments. Taxpayers who are paid by agencies that are not in the levy program do not face the same pressures to pay Uncle Sam as those who are paid by agencies in the levy program. Nor are companies pursued as vigorously as an individual taxpayer might be.
These inequities must be corrected. Failure to do so risks not only federal revenues, but also the already strained IRS credibility.
If you would like more information, contact Keith Ashdown at (202)-546-8500 ext. 110 or by email at firstname.lastname@example.org. TCS is at www.taxpayer.net
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