Judicial Watch • Govt. Contractors Don’t Pay Taxes

Govt. Contractors Don’t Pay Taxes

Govt. Contractors Don’t Pay Taxes

MARCH 15, 2006

A Senate panel is finally investigating why the U.S. Government allows private companies with lucrative federal contracts to avoid paying millions of dollars in taxes each year.

A study published by the Government Accountability Office reveals that thousands of contractors owe more than $6 billion in taxes yet continue to do business with the government. The U.S. Senate Committee on Homeland Security and Governmental Affairs began looking into the matter a few years ago but has finally become active in putting an end to the practice and even pursuing the delinquent contractors.

The committee’s chairman, Minnesota Senator Norm Coleman, stressed that these are not everyday tax delinquents but rather contractors who receive millions of dollars from American taxpayers and yet refuse to pay their fair share of taxes.

A few examples include a communications equipment company that got $100,000 in federal payments while owing nearly $900,000 in upaid taxes and a security services company that got $100,000 while owing more than $3 million in mostly payroll taxes.

The contractors do business with the government through the General Services Administration, which acts as a catalyst for nearly $66 billion in federal spending and claims to help federal agencies better serve the public by offering the best value.

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