President Obama Memorandum: Government Contractors and Unpaid Taxes
January 20, 2010 by St. Lucie Times Staff · Leave a Comment
President Obama today issued a memorandum for the Heads of Executive Departments and Agencies blocking contractors who are delinquent on their taxes from receiving new government contracts.
According to remarks from the President,
Studies by the Government Accountability Office have identified tens of thousands of such dead-beat companies that are being awarded government contracts. One company owner who owed over $1 million in taxes was paid over $1 million as a defense contractor — and instead of using that money to pay his back taxes, he chose to buy a boat, some cars, and a home abroad with his earnings. The total amount owed in unpaid taxes by companies like that is estimated at more than $5 billion.
In addition to this directive to the Executive Departments and Agencies, the Memorandum is calling on Congress to provide the necessary tools to ensure that American people’s tax dollares are not used to increase the profits of non-tax paying companies.
This is not a new effort for President Obama. As a Senator in the 110th Congress (2007-2008) he sponsored S. 2519: Contracting and Tax Accountability which was a bill to prohibit the awarding of a contract or grant in excess of the simplified acquisition threshold unless the prospective contractor or grantee certifies in writing to the agency awarding the contract or grant that the contractor or grantee has no seriously delinquent tax debts, and for other purposes. This bill never became law. The last action was on December 19, 2007, when it was read twice and referred to the Committe on Homeland Security and Governmental Affairs.
Another similar bill, HR 4881: Contracting and Tax Accountability was introduced to prohibit the awarding of a contract or grant in excess of the simplified acquisition threshold unless the prospective contractor or grantee certifies in writing to the agency awarding the contract or grant that the contractor or grantee has no seriously delinquent tax debts, and for other purposes. This bill was passed by the House on April 14, 2008, received in the Senate on April 15, 2008, read twice and referred to the Committee on Homeland Security and Governmental Affairs.
Here is the Memorandum in its entirety.
Here is the White House Fact Sheet on this Memorandum.
