A Treasury Department watchdog said Thursday that 70 federal agencies owed about $14 million in unpaid taxes at the end of last year.
Federal agencies are exempt from paying federal income taxes, but they are responsible for turning over employment taxes, mainly Social Security and Medicare taxes, that their employees must pay.
The Treasury inspector general for tax administration said 40 of these delinquent tax accounts totaling about $2.6 million were still open three years after being identified, and in 80 percent of those cases, the investigations had been suspended. The offending agencies were not identified.
The $14 million isn’t a lot compared with the $768 billion in employment taxes theIRS collected in 2011.
But Inspector General J. Russell George stressed that “federal agencies must comply with the same filing and paying standards that apply to all American taxpayers.”
Cracking down on delinquents is complicated by IRS policies that do not allow enforcement actions against federal agencies and by restrictions against penalizing or imposing interest on agencies that are behind in making their payments.
The IRS, in a statement, said it was committed to the timely collection of employment taxes and that the amount of delinquent taxes had dropped from $406 million in 2005 to $14 million last year, a small fraction of tax deposits made by federal agencies.
The agency said that last year agencies made more than $90 billion in employment tax deposits.
Front Section, Pages 2 on 09/28/2012