Report: Federal agencies fail to pay employment taxes ($45 million)

Report: Federal agencies fail to pay employment taxes
By Jim Abrams, Associated Press August 31, 2007

WASHINGTON (AP) -- Federal offices owe some $45 million in delinquent withholding taxes and the Internal Revenue Service needs to do more to ensure that the government lives up to its taxpaying obligations, according a report issued Friday.

The Treasury Inspector General for Tax Administration, who oversees IRS operations, also found that as of January this year 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, must meet employment tax deposit and reporting requirements. Some 86,000 federal, state and local entities file and pay employment taxes for some 23 million employees, 20 percent of the U.S. work force. These offices pay wages of more than $760 billion and employment taxes of more than $200 billion annually.

The report, which was requested by the IRS chief financial officer, said that as of December last year the IRS unit in Holtsville, N.Y., that handles federal cases, was assigned some $45 million in delinquent taxes. It said that 99 entities owing $5.8 million had been assigned for resolution for more than one year.

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What agencies haven't paid taxes? Name them.