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Judicial Watch • IRS Awards Millions in Contracts to Tax-Delinquent Companies

IRS Awards Millions in Contracts to Tax-Delinquent Companies

IRS Awards Millions in Contracts to Tax-Delinquent Companies

JULY 01, 2015

Just when you thought the Internal Revenue Service (IRS) couldn’t sink any lower, an embarrassing federal audit exposes the scandal-plagued agency for awarding dozens of tax-delinquent companies with millions of dollars in government contracts.

It may seem like a bad joke, that the nation’s feared tax agency does business with companies that cheat it and violate its mission. At the very least it’s ironic, though the IRS has been embroiled in so many scandals recently that this may seem unworthy of coverage. Judicial Watch still believes it’s worth noting however, that the colossal agency responsible for collecting taxes lets its business pals slide. Whether its incompetence or special treatment, it’s outrageous and unacceptable.

During a two-year period the IRS awarded 57 contracts worth nearly $19 million to 17 corporations that owed federal taxes during that period, according to a report released recently by the Treasury Inspector General for Tax Administration (TIGTA). In doing this, the IRS actually violated a 2012 federal law called the Consolidated Appropriations Act prohibiting government agencies from using appropriated funds to enter into a contract with a company that has certain federal tax debt or felony convictions.

It’s bad enough that other government agencies reward tax scofflaws with coveted federal contracts, but in the case of the IRS it’s downright shameful. “When the Internal Revenue Service (IRS) conducts business with contractors that do not pay their Federal taxes, it conveys a conflicting message in relation to its mission to ensure compliance with tax laws,” The TIGTA report states. The IRS watchdog further points out that the Consolidated Appropriations Act requires federal agencies to determine whether a prospective contractor has federal tax debt prior to the award of contract actions. Certainly, the IRS has the ability, not to mention resources, to do this.

Perhaps the IRS has been preoccupied conducting its witch hunt of conservative groups. JW has been a leader in uncovering the sordid details of that major scandal and has obtained damaging government records that show the IRS illegally colluded with another federal agency to crack down on conservative nonprofit groups during the 2012 election cycle. The IRS director at the center of the scheme, Lois Lerner, not only broke agency rules—as well as the law—to target conservative organizations, she also lied to Congress in an effort to cover up the wrongdoing.

JW has also reported extensively on a multitude of other transgressions at the IRS over the years, including the fact that the disgraced agency has long allowed prison inmates to fraudulently received tens of millions of dollars in tax refunds and  illegal immigrants billions by allowing them to improperly claim tax credits that they don’t qualify for. A few years ago IRS employees were charged with stealing hundreds of thousands of dollars in government benefits, including food stamps, welfare and housing vouchers.

As the deadline for Americans to pay their taxes approached earlier this year IRS employees were singled out as the federal workers with the highest number of tax delinquents that received bonus pay. A federal audit revealed that at the IRS alone, staff members with violations received close to $3 million in awards on top of their regular government salary. Some got the extra cash despite being cited for using drugs, making violent threats, fraudulently claiming unemployment benefits and misusing government credit cards.

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