Tax Lawyer's Blog

Kevin Kilduff has been stopped by the IRS from making a living for two years because he filed a few tax returns late, but real tax scofflaws get to keep their federal jobs. 

From Justin Higginbottom of Tax Policy Blog:

From Politico:

Chaffetz will introduce legislation Thursday that would allow Hill offices to get rid of the hundreds of Senate and House staffers who owe the government millions of dollars.

In 2008 alone, 447 House employees and 231 Senate workers didn’t pay their taxes, according to figures from the IRS, Office of Personnel Management and Department of Defense.

“We have over 600 staffers on Capitol Hill not paying their taxes. That’s just not acceptable,” Chaffetz said in an interview with POLITICO. “It’s disingenuous to take federal taxpayer dollars and not pay your full share of taxes. It’s wrong.”

Federal employees in the U.S. House of Representatives owed more than $5.8 million in unpaid taxes in 2008. The Senate employees owe more than $2.46 million, according to figures.

600 staffers not paying taxes sounded high to me.  But with the total number of staffers upwards of 20,000, that is at most a 4% non-compliance rate.  The IRS in 2009 estimated a non-compliance rate of about 16% for all Americans. 

One might think that those who work in the public servant sector would have more respect for government law.  Then again, one might think that of the public servants too.

It didn’t work out so well for Chaffetz’s bill, says Kay Bell of Don’t Mess With Taxes:

Things looked pretty good for Chaffetz’s proposal early on. Edolphus Towns (D-N.Y.), chairman of the House Oversight and Government Reform Committee was favorably disposed toward the amendment. To woo his fellow Democrats, Towns tweaked the measure to allow delinquent federal workers to hang onto their jobs if they have set up a tax payment plan with the IRS or if they’re facing serious financial hardships.

But the modified language wasn’t enough. Several Democrats balked, expressing concerns that individuals could be severely penalized before it was determined that the IRS was correct in its tax delinquency assessment.

So Towns pulled the entire bill. 

Also, no word yet on how long Treasury Secretary Geithner - overseer of the entire federal tax system – will be suspended from his job.

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