The government isn't living up to the same tax requirements expected of average Americans, with 70 federal agencies failing to pay timely taxes.
If Uncle Sam wants to find tax scofflaws, he might want to look within.
At least 70 federal agencies were delinquent on taxes at the end of last year, owing about $14 million, according to the Treasury Department's internal tax watchdog. In all, about a third of the delinquencies were three or more years old, the report found.
"Federal agencies should be held to the same filing and paying standards as all American taxpayers," the Treasury Inspector General for Tax Administration declared in a new report.
Federal agencies are exempt from paying federal income taxes, but they must cover employment taxes, mainly Social Security and Medicare taxes, that their employees must pay.
The inspector general found the 70 agencies had a total of 126 delinquent tax accounts, with 40 of those accounts totaling about $2.6 million still open three years after being identified. In 80 percent of those cases, the investigations had been suspended, the watchdog said.
The IRS has known about federal agency delinquencies for years. A 2007 inspector general report, for instance, cited several examples, but the agency failed to take the corrective actions necessary to make sure the U.S. government lives up to its own tax rules.
In fact, the inspector general described a frustratingly convoluted approach by which the IRS has tried to resolve delinquent taxes with its brethren agencies in government.
"A lack of control over processing federal agency cases permitted the use of enforcement actions that violated IRS policies," the report said. "In addition, limited procedures concerning the timeliness of case processing resulted in delayed case resolution."
The IRS said it agrees with the inspector general's recommendations for fixing the problems and has already implemented one of the recommended solutions.
The Interal Revenue Service or IRS is the government's tax-collecting and tax enforcement agency.
The Treasury Inspector General for Tax Administration is the the Treasury Department's internal watchdog who looks for waste, fraud, abuse or other problems in tax collections.