Federal workers owe billions in back taxes

Federal workers owed the government more than $3 billion in back income taxes in 2008, just as federal tax revenues started to suffer from the recession.

More than 276,000 federal employees and retirees owed back income taxes as of Sept. 30, 2008, according to data from the Internal Revenue Service. The $3.04 billion owed was up from $2.7 billion owed by federal employees and retirees in 2007.

Among cabinet agencies, the Department of Housing and Urban Development had the highest delinquency rate, at just over 4 percent. The Treasury Department, which includes the IRS, had the lowest delinquency rate, at 0.98 percent.

Overall, the 9.7 million federal workers included in the data had a delinquency rate of about 2.9 percent.

“It’s not right for a few to shirk their obligations, and it’s especially offensive that these tax delinquencies come from federal employees and contractors,” said Sen. Chuck Grassley of Iowa, the top Republican on the Senate Finance Committee.

The IRS doesn’t provide a comparable delinquency rate for income taxes paid by the public. The nation’s overall compliance rate, which includes taxes paid by small businesses and corporations, has hovered around 85 percent for decades, according to IRS statistics.

Most residents who owe back income taxes file returns but cannot pay the full amount at tax time, said IRS spokesman Anthony Burke. Others have their tax bills increased through audits and cannot pay the higher bill.

The statistics on federal employees do not include those who are on payment plans. The IRS doesn’t publicize the data, but makes it available upon request. The data was first reported by Washington radio station WTOP.

The recession has put a big dent in federal tax receipts. Individual income tax receipts for the fiscal year that ended in September were down about 20 percent from the year before.