Tax evaders? Government agencies
U.S. entities owe $45 million in withholding taxes, while state and local offices owe $254 million.
WASHINGTON - Federal offices owe about $45 million in delinquent withholding taxes for their employees, according to a report issued yesterday
The Treasury inspector general for tax administration, who oversees Internal Revenue Service operations, also found that, as of January, delinquent state and local government accounts totaled $254 million.
"It is outrageous that government entities are failing to pay their employment taxes," Inspector General George J. Russell said in a statement. "It is especially troubling that federal organizations are a part of this problem. The IRS must develop comprehensive procedures to remedy this inexcusable situation."
Government offices, like any private employer, are required to turn over to the IRS federal taxes withheld on their workers' pay.
About 86,000 federal, state and local government entities file and pay employment taxes for 23 million employees, 20 percent of the U.S. workforce. These offices pay wages of more than $760 billion and employment taxes of more than $200 billion annually.
Yesterday's report, which was requested by the IRS chief financial officer, said that as of December 2006, the IRS unit in Holtsville, N.Y., which handles federal cases, was assigned about $45 million in delinquent taxes. It said 99 government bodies owing $5.8 million had been assigned for resolution for more than one year.
The totals for government delinquencies were minimal compared to the $6 billion owed by businesses, but the report stressed that "it is critical to the image of the United States that federal government entities be held to the same standards as private employers."
The IRS said it agreed with the report's recommendations. The agency said a database had been developed to identify the causes and resolutions for delinquency cases.