Federal workers stalling the IRS

Associated Press

WASHINGTON — Federal employees and retirees owe more than $2.5 billion in back taxes, but actually are more conscientious taxpayers than Americans overall, the Internal Revenue Service says.

As of October 2001, just over 2.8 percent of federal employees and retirees, or about 244,000, had balances due on past income taxes but had not agreed to an installment plan with the IRS.

For the population as a whole, that percentage was 5.2 percent. Still, IRS commissioner Charles Rossotti says tax delinquency at any level by federal workers is cause for concern.

"If the public perceives that federal employees do not maintain the highest level of tax compliance, public confidence in government will suffer," Rossotti said in a letter to each federal agency head detailing that department’s noncompliance rate.

The data, compiled by the IRS annually since 1993 and to be released next week, includes Congress, the White House, the Cabinet departments, courts and independent agencies.

In all, 381,500 federal employees or retirees out of almost 8.7 million were behind on their taxes. About 11.5 million of an estimated 177.5 million taxpayers nationwide owed $28.2 billion.

Those totals included about 2.3 million taxpayers who were paying off $8.6 billion in unpaid taxes through monthly installment agreements. About 137,000 federal employees were paying off $608.6 million that way.

It is the noncompliance rate for those who are not trying to pay off their tax bills that draws the most scrutiny.

On Capitol Hill, the House had a noncompliance rate of over 4 percent, compared with almost 3.5 percent for the Senate. These rates can include both members of Congress and their staffs, although the IRS is not permitted to disclose names of any individuals listed in the report.

The Executive Office of the President had a noncompliance rate of 3.4 percent. The Education Department and Department of Housing and Urban Development both were above 4 percent, highest among Cabinet agencies.

The Defense Department had by far the biggest outstanding tax bill at $205.6 million. In addition, more than 110,000 retired military personnel owed more than $1 billion, including those who had installment agreements to pay off their bills.

The Treasury Department, which includes the IRS, had the lowest noncompliance rate among Cabinet agencies at 1.5 percent. Even lower was the FBI, which had 1.4 percent, with 812 individuals owing about $3.5 million.