At a time when the White House is projecting the largest deficit in the nation's history, Uncle Sam is trying to recover billions of dollars in unpaid taxes from its own employees.
Federal workers owe more than $3 billion in income taxes they failed to pay in 2008. According to Internal Revenue Service documents, 276,300 federal employees and retirees owe $3,042,200,000.
The IRS tracks the voluntary compliance rate of federal employees and retirees each year, and each year feds come up short. The one bright spot in this year's report is that after several years of a steady increase, the amount owed by feds is down from the previous year.
Federal employees and retirees owed $3,586,784,725 in unpaid income taxes in 2007.
The documents show delinquent employees from nearly every federal agency with more than 25 employees. Based on percentages, the Department of The Treasury, which includes the IRS, has the best compliance rate. Fewer than 1 percent of Treasury employees didn't pay their taxes in 2008.
The IRS is the only federal agency where employees can be fired for not paying their taxes. The non-compliance rate for IRS employees in 2008 was 0.76 percent -- down from 0.89 percent in 2007.
The agency with the most tax scofflaws is the U.S. Postal Service, with 28,913 employees who owe $297,933,756. But that is still a dramatic improvement from 2007 when more than 54,000 employees owed more than $407 million.
"We urge our employees to comply with all tax laws and are encouraged that many who have been delinquent have agreed to payment plan with the IRS," USPS spokesperson Mark Saunders tells WTOP in a statement.
"It's important to look at the percentage of postal employees who may be delinquent on their federal taxes, not just the number itself. According to IRS figures, the delinquency rate for Postal Service employees is relatively small."
The Postal Service, the largest employer in the federal government aside from the military, has a non-compliance rate of 3.95 percent compared to the federal average of 2.8 percent.
Retired military personnel make up about 33 percent of the money owed with $1,343,538,055 in unpaid taxes for 2008.
The agency with the highest percentage of delinquent employees is the National Capital Planning Commission, where 10.42 percent of its 48 employees owe $26,947.
"NCPC is committed to working closely with the Department of The Treasury to resolve issues of federal income tax delinquency involving its staff," NCPC spokeswoman Lisa MacSpadden said in a statement.
"The agency takes this matter very seriously and recognizes that federal employees must adhere to the highest ethical standards regarding financial matters.
"We remind our employees of this responsibility as part of our mandatory annual ethics training. Upon receipt of an official notice from the IRS about a specific employee's noncompliance, NCPC will take appropriate administrative action."
Other notable agencies on the list:
- Executive Office of the President (includes the White House): 50 employees owe $812,917;
- U.S. Senate: 231 employees owe $2,469,026;
- U.S. House of Representatives: 447 employees owe $5,809,631;
- U.S. Tax Court: 3 employees owe $39,752;
- Active Duty Military: 27,111 employees $102,474,672.
While some taxpayers may scratch their heads and ask why the federal government doesn't garnish the wages of these employees, the reality is they can't. According to federal tax laws, employees are treated the same as any other taxpayer who doesn't pay their taxes.
The IRS must go through the same procedures and court process with feds as it does with John Q. Public. Once a court awards the IRS a judgment or if the employees enter a voluntary payment plan, the IRS can garnish wages. However, federal employees do jeopardize any security clearance they may have if they don't pay their income taxes.
As for the general public's voluntary compliance rate, the IRS no longer tracks those numbers, so it is impossible to compare. But an IRS report from 2001 (PDF) showed the total tax gap to be about $345 billion. The tax gap is the difference between what is owed each year and what is paid, and includes income, corporate, employment, estate and excise taxes.
