Federal Employee Tax Accountability Act of 2013

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 249) to amend title 5, United States Code, to provide that persons having seriously delinquent tax debts shall be ineligible for Federal employment.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within to revise and extend their remarks and include extraneous materials on the bill under consideration.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, first of all, I would like to commend Mr. Chaffetz. Like the last piece of legislation, Mr. Chaffetz reintroduces a bill that passed overwhelmingly in the last Congress but was not taken up by the Senate. As Mr. Chaffetz said, it is in fact time for the Senate to at least give us an up-or-down vote on this legislation. By bringing it early in the Congress and, I believe, all these bills on a bipartisan basis, we make it clear that we want to hold ourselves to the standard that the taxpayers believe we should.

All Federal employees are currently held for paying their taxes by the code of ethics of the executive branch. So how can someone who, by the code of ethics, in fact not have satisfied in good faith their obligations as citizens, including all financial obligations, especially those to the Federal, State, and local taxes that are imposed by law, how can somebody who in fact hasn't done it and has reached a point of garnishment, reached a point at which they are unwilling to pay their just taxes, have no appeals or any pending, how can they in fact continue to expect to be Federal employees? The truth is these employees have given up any question about their ethics by avoiding it.

Before going further, I would like to have the Speaker take note that in fact for us, as Federal employees, our withholding is already taken out of our taxes. So to become seriously in arrears in our taxes, for the most part, has to do with activities outside our role. We're well insured for health care. Our taxes have already been withheld. So although there are occasions in which a taxpayer may find themselves seriously in arrears for some reason otherwise, this bill intends and has carefully crafted every possible exception so they could continue to work if, in fact, reasonable measures have been taken by the employee. In fact, if an employee simply agrees to be garnished for past taxes, pursuant to the law, they in fact can continue to work.

So I'd like to preface by saying this bill has passed before and has been well thought out. We in fact sent a letter to IRS asking them for a timely response. And to my dismay, they were not interested enough to respond to us by the deadline. Of course, the deadline for responding really was in the last Congress.

I reserve the balance of my time.

Mr. Speaker, the gentleman is right. And I would take note that this afternoon the IRS did offer to speak to us over the phone but had no answers in writing, which continues to befuddle me a little bit that we can't get answers. I will continue to work with the ranking member to get those answers.

At this time, I yield 5 minutes to the author of the bill, the gentleman from Utah (Mr. Chaffetz).

Mr. Speaker, I yield the gentleman an additional minute.

Mr. Speaker, I yield myself such time as I may consume.

I join with the gentlelady from the District of Columbia in applauding what the IRS has done. The IRS effectively gave itself the rules that Mr. Chaffetz would like to have all Federal civilian workers living under.

The IRS has a delinquency rate now of 1 percent. So if you take a fraction of that 1 percent that could possibly be out of compliance for a short period of time, and that's what happens. You've lowered the overall rate from, for example, the Government Printing Office, 7.6 percent; the 316,000 people at the Department of Veterans Affairs, 13,000 of them, or 4.3 percent, are seriously in arrears.

Mr. Speaker, the gentlelady is absolutely right: the IRS did the right thing, and it worked. You've got a compliance rate down to 1 percent failure, or 99 percent positive compliance rate.

For all the Federal workers who are listening carefully because this could affect them, they're looking to their left and their right endlessly wondering who these deadbeats are because, in all cases, it's below 10 percent, and at the IRS at 1 percent.

Mr. Speaker, the case for this legislation is made by the IRS's success, and I reserve the balance of my time.

Mr. Speaker, I'm not going to do too much responding to something that asks why something was brought on April 15, except to say that the minority was very happy to have us bring on April 15 something to hold contractors responsible on tax day for taxes, and we thought appropriate that both should be about this tax day in which 99 percent of Americans have paid all their taxes, whether they like to or not, and a small percentage have not.

With that, I yield 1 minute to the gentleman from Utah (Mr. Chaffetz).

Mr. Speaker, may I inquire as to how much time we have remaining?

At this time, I yield 2 minutes to the gentleman from Utah (Mr. Chaffetz).

I yield myself 1 minute.

The gentleman from California is new, and I'm sure he did not mean to disparage our intention.

Our intention was, in fact, to bring accountability and, in fact, a sense of pride to the Federal workforce, one in which 96-point-some percent do pay their taxes, and of the remaining ones who do not, the vast majority has made arrangements to deal with taxes in arrears.

But, Mr. Speaker, less than a year ago, I had my house robbed. I live in a low-crime neighborhood. Less than 2 percent of the homes get robbed in a given year, but the police still responded and still said, I'll do something about your home being burglarized.

All we're saying here is: let's stop talking about the 97 percent who do the right thing, and let's deal with those who do not in a way that encourages them, like the IRS has, to start doing the right thing and lower that failure rate to 1 percent or less.

I reserve the balance of my time.

I yield myself such time as I may consume.

Mr. Speaker, the gentlelady is entitled to her opinion, but I don't believe her facts.

Our information shows that, in fact, first of all, this bill only pertains to civilian personnel. It does not affect uniformed military personnel. Uniformed military personnel can be court-martialed for not living up to their financial obligations. That is certainly more than we are considering here.

The fact is the numbers we presented, the numbers quoted here, represent civilian workers. Some of those civilian workers do also serve in the Reserves, and some of them are also retired individuals, but let's understand this is not about the men and women deployed in uniform. This is, in fact, about civilian workers who may have supplemental incomes from retirement, who may, in fact, also be Reserves. This is all about people who receive often more than $100,000 a year and have not made arrangements to catch up on taxes that are seriously in arrears by up to $10,000 or more.

I reserve the balance of my time.

I now yield 1 minute to the gentleman from Utah (Mr. Chaffetz).

I yield 10 seconds to the gentleman from Utah (Mr. Chaffetz).

Mr. Speaker, how much time do I have remaining?

I yield myself the remaining time.

Mr. Speaker, I would like to close on a little bit quieter note than the debate. The debate was, rightfully so, heated, and it was heated because, in fact, we are making an important symbolic statement in this legislation.

$1 billion is a lot of money to the taxpayers listening, but the principle here is extremely important. It's a principle that shows that, when the IRS changed their rules, they didn't fire very many people. I'm sure, in fact, what they got was compliance, far greater compliance, but let's go through a few things because the gentlelady, my colleague and friend from California (Ms. Speier), used a larger number, and the larger numbers, in fact, are worth using in closing.

We've been talking, up until now, about $3 billion, $2.976 billion, that in fact is about the civilian employees of the Federal Government. They have a delinquency rate of approximately 3.62 percent. She mentioned other individuals, and I want to mention in closing their delinquency rate:

Civilian retired: understand, these are not individuals you can fire. They're retired, but their delinquency is 2.5 percent.

Military active duty: these are the men and women who have a different set of rules. They can be court-martialed if they don't live up to their obligations, 2 percent. Remember, that 2 percent includes all those who may eventually comply.

Military Reserve and Guard: these are the men and women who give up their day jobs, often taking a huge pay cut in doing so, often unanticipated, 2.4 percent.

Military retired, 4.3 percent. Mr. Speaker, I can't account for why, when military people retire, they find themselves seriously in arrears in taxes. But what I can say is when we look at 1 percent at the IRS, and 2 percent for those men and women getting a private's pay or a corporal's pay, they manage to keep their taxes straight.

The Federal workforce has a high compliance rate, as has been said repeatedly by my colleagues. Their compliance rate is nearly twice the rate of the public as a whole. Of course, the public as a whole includes over 7 percent unemployed, and it includes all kinds of other characteristics that lead to people being in default.

What we're saying here today is the IRS made a decision to have a compliance standard that has dramatically reduced failure to comply, and has put us in a situation where people of the IRS can say proudly: We pay our taxes. We pay our taxes at a 99 percent rate, and we deal with those who do not live up to promising to pay the rest.

We just want the same for the Federal workforce, and I believe Federal workers listening here today would agree that in fact since most of them do exactly what's right, all of them should be held to do what is exactly right. I urge passage of the bill.

I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

I thank Chairman Issa, Speaker Boehner, and Leader Cantor for their support in allowing us to bring this piece of legislation, a piece of legislation that has come before this body before. This is not a new topic. This is not something that just sprung up with us in the last 10 days here.

Mr. Speaker, on tax day, 2013, I want to impress upon my colleagues that Federal employees who consciously ignore the channels and processes in place to fulfill their tax obligations must be held accountable. The Federal Employee Tax Accountability Act addresses noncompliance with our tax laws by prohibiting individuals with serious delinquent tax debt from Federal civilian employment.

Most taxpayers file accurate tax returns and pay them on time. Most Federal workers do that--the overwhelming majority of them do it. In fact, statistically, more than 96 percent of our Federal employees do the right thing and they do it on time. But, unfortunately, there are a few bad apples out there. There are a few people out there that, despite all the processes, all the appeals, all the things out there, Mr. Speaker, they still choose to thumb their nose at the rest of us. Unfortunately, there are 107,000 Federal workers who don't pay their taxes. It accounts for about $1 billion in uncollected taxes.

In 2011--the most recent year for which the IRS data is available-- they tell us that 107,658 civilian Federal employees owed more than $1 billion. Now, the statistics say they have a greater compliance than the rest of the public. But let's remember, when you're unemployed, you're probably going to have a hard time complying. Employment for those that are Federal workers is 100 percent. They have a job. They have a responsibility to pay their taxes.

As the chairman indicated, the intent of the bill is simple: if you're a Federal employee or applicant, you should be making a good faith effort to pay your taxes or to dispute them, as the taxpayers have a right to do.

Under H.R. 249, individuals having seriously delinquent tax debts are ineligible for Federal civilian employment in the executive and legislative branch, including congressional staff. ``Seriously tax delinquent'' is defined as an outstanding Federal tax debt for which a notice of lien has been publicly filed.

And there are exemptions. If you're being paid in accordance with an installment agreement, perhaps you're having your wages garnished, you have an offer of compromise, or wage garnishment, you're exempted; it's not going to affect you.

The IRS has already told us on the record when they testified in a hearing that the overwhelming majority of the 107,000 people fall within that category. They testified to the body in the last Congress that roughly 12 percent of the 100,000 people would fall into this category that we're here talking about today. We've had a hearing about this. We did ask the IRS about this.

I also want to note, Mr. Speaker, on page 4 of the legislation at (c)(3):

An employee may continue to serve, in a situation involving

financial hardship, if the continued service of such employee

is in the best interests of the United States, as determined

on a case-by-case basis.

There's an opportunity to have the person who's in charge to make a determination: Do you know what? I have looked at this, and I grant this person an exemption.

But, as I did when I spoke to a group of HR professionals who work within the Federal Government, I told them about this and said, You need some tools to take care of the bad apples. I could see every one of their heads shaking, yes, please, give us this tool.

The bill requires individuals applying for Federal jobs to certify they are not seriously tax delinquent. Agencies will also conduct periodic reviews of public records for tax liens. Individuals with serious delinquent tax debt may avail themselves to existing due process rights, including going before the Merit Systems Protection Board.

In fact, in the last Congress, Mr. Speaker, Mr. Lynch, who's as passionate on this issue as you can possibly find, offered some amendments. And let me read from the record when we accepted the amendment offered by Mr. Lynch of Massachusetts:

Mr. Lynch. With that refinement here, a friendly amendment,

I certainly would vote for the bill if the amendment were

included.

The amendment was included. We did this in a bipartisan way. That's why it sailed through the House of Representatives last time and why it should sail through again.

In addition, individuals have 6 months to demonstrate that their tax debt is not seriously delinquent--something that Mr. Lynch asked for, something we agreed with, something that we move forward with.

For many of my colleagues on both sides of the aisle, this legislation should sound familiar because we did pass it.

Actually, at this time, what I would like to do is yield back and respond based on the other comments.

I thank the chairman.

Mr. Speaker, only in Washington, DC, can we say that this is not a serious issue. We're talking about 107,000 people and a billion dollars in uncollected taxes when the very Americans that are paying their paychecks are writing out their checks.

I would also look at the companion piece of legislation, which is $5 billion, that deals with the contractors. What we're saying to the employees of the Federal Government--the men and women who are patriotic, who are doing their job; they're doing the right thing; they work hard; they love this country; they're the first ones to run and respond--we're going to take care of you; we've got your back. Because every once in a while there is a bad apple, there is somebody that works in that department, there is somebody that works in that agency who doesn't play by the rules like everybody else does. They give this country and they give their counterparts and their employees a bad name. We're going to stand up for them by giving that head of that department in the agency the opportunity to fire somebody if they don't comply.

Pay your Federal taxes, you're in good shape; don't pay your Federal taxes, don't put yourself in place, then we're going to give you an opportunity to be let go.

Mr. Speaker, I'd like to harken back to the comments of President Obama on January 20, 2010.

Make no mistake; the President was talking about delinquent contractors, not specifically about Federal workers. But I want you, as you listen to the President, in his own words, to wonder why should-- these, too, are families. Contractors are families; they're Americans; they're people. Some of them are bad apples. Most of them do a good job.

But listen to the President as he's talking about contractors, and say: Should the same be true for Federal workers?

Quote, from President Obama:

All across this country, there are people who meet their

obligation each and every day. You do your jobs; you support

your families; you pay taxes you owe because it's a

fundamental responsibility of citizenship. And yet, somehow,

it's become standard practice in Washington to give contracts

to companies that don't pay their taxes.

Later on, the President said:

The status quo, then, is inefficiency, and it's wasteful by

the larger and more fundamental point that it is wrong. It is

simply wrong for companies to take taxpayer dollars and not

be taxpayers themselves. So we need to insist on the same

sense of responsibility in Washington that so many of you

strive to uphold in your own lives, in your own families and

your own businesses.

The same should be true for Federal workers. And when those Federal workers are giving out those Federal contracts by the hundreds of billions of dollars, let them be able to look people in the face and say, We hold ourselves to that same high standard. We're not having a separate standard for contractors and for you. Those of us that do work for the Federal Government are honest in our dealings. We pay our taxes. You know what? If we don't around here, they eventually fire us.

That seems to me to be common sense and the right approach.

This bill doesn't threaten the Federal employees. It only threatens the Federal employees who don't pay their Federal taxes. You pay your taxes because you get your income from the taxpayers. It doesn't affect you.

What I hear continually, Mr. Speaker, is, Oh, no problem here. Don't worry about it.

It's $1 billion in uncollected taxes. For far too long, this Congress has ignored this. They keep giving contractors contracts up to the tune of $5 billion a year. I introduced that bill as well.

So to suggest, Mr. Speaker, that this bill is unfair, it's unwarranted, it's going to harm Federal employees---it's going to protect Federal employees, because the ones who are doing the right job, that are patriotic, are protected under this bill. Only those who thumb their noses and won't pay their taxes are the ones who should be scared of this bill.

Will the gentleman yield?

There are 107,000 people who haven't paid about $1 billion in taxes. To suggest there isn't a problem is, I think, factually without merit.

Mr. Speaker, I yield myself such time as I may consume.

As one who represents many Federal employees, with the Social Security Administration smack dab in the middle of my district, with many of my constituents getting up at 4 o'clock in the morning, catching the train over here from Howard County and Baltimore County to work for the Federal Government, a group of people, many of whom are being subjected now to furloughs, have been subjected to pay freezes, in some instances have been placed in a position where they have to pay more toward their pensions and get less, a group of people who in many instances I run into them at the gas station, at the Pancake House, or wherever I may see them, who are very much concerned about a word that has become a significant word in this House, ``uncertainty.'' I strongly oppose H.R. 249, a measure that would require the Federal Government to fire--to fire--Federal employees who have an outstanding tax debt. The legislation is unwarranted, unnecessary and, in fact, counterproductive.

I believe that Federal employees, like all Americans, should pay their taxes, and I don't think that there's one single Member of this Congress that feels otherwise. We all believe that Federal employees and all folks who owe taxes ought to pay them. Federal workers hold the public trust and should be held to a high standard of conduct. The fact is that Federal employees have met and exceeded that standard.

The legislation is unwarranted because the tax delinquency rate for Federal employees is less than half that of the general public. In 2011, the tax delinquency rate for the general public was 8.2 percent. In the same year, the tax delinquency rate for Federal workers was only 3.62 percent. Now, let me make it clear: I would suggest that it would be best--and wonderful--if that percentage was zero, but it's not. But again, the general delinquency rate, 8.2 percent; Federal workers, 3.62 percent.

The legislation is unnecessary because the IRS and other executive agencies already have procedures in place to recover back taxes from Federal employees. Through the Federal Payment and Levy Program, the IRS can impose a continuous levy on Federal salaries and annuities up to 15 percent until the debt is paid. Agencies also have the authority to take disciplinary action against employees for delinquent tax debts, which may include removal, if necessary.

The legislation is counterproductive because it would make it more difficult to collect unpaid taxes from Federal employees by requiring their termination and eliminating the ability to impose levies on their salaries.

On another note, I just left, about 3 hours ago, a job fair that I sponsored in my district where 9,000 unemployed people showed up. In talking to some of the various agencies, they said, Congressman Cummings, we're glad that the State of Maryland is now dealing with child support issues a little bit differently because we used to take everybody's license. We would make it almost impossible for them to make money so that they could pay the child support. They said now we're beginning to turn some of those laws around because, again, we want to be effective and efficient in collecting the money. Here, if a person has no job, how are they going to pay their taxes?

I am also concerned that this legislation is being rushed to the floor today to apparently make a political point. During committee debate over the legislation, questions were raised. To his credit, the chairman agreed that we would try to get some responses from the IRS about the rules and procedures regarding debt collection, options for resolving delinquencies, payment options, tax delinquencies of IRS employees, and other issues. The chairman promised to obtain the answers to these questions from the IRS and to work with Democrats before the bill was brought to the floor.

Now, I have absolutely no doubt that the IRS failed to do what they were supposed to do; they did not give us the information. But there was a reason that we wanted that information. We wanted the information so that we could base our decisions on sound facts. If we are placing people in a position where they will lose their way of feeding their family and having a roof over their head and taking care of their kids, it would be nice to have information.

I tell my staff all the time: Give me the information so that I can make a decent decision. We don't have that information, and that is unfortunate. Hopefully, at some point, we will get it from the IRS. Again, Mr. Speaker, I don't blame the chairman. He did his part. He submitted his letter, I know he did, but we still have not heard from

the IRS. So on April 4, 2013, I joined with Chairman Issa in sending that letter to the IRS, requesting specific information that the committee members agreed was necessary to fairly and fully evaluate the need for this legislation.

Again, without this information, it is unclear whether various scenarios under which taxpayer disputes of tax debt would be exempted under the bill. For example, it is unclear whether an appeal from a collection due process hearing, litigation proceedings in U.S. Tax Court, or hearings under the IRS' Collection Appeals Program would trigger an exemption.

Contrary to the chairman's assurances, the Republican leadership has insisted on bringing this bill to the floor without the benefit of this information and without resolving the many concerns raised during the committee debate. For these reasons, I urge my colleagues to join me in voting against this bill.

Again, we need information, but more importantly, there is something that the chairman said that I think we need to be clear on. I want to see, again, a situation where everybody pays every dime that they are supposed to pay, but I don't think that people get fired if they're not Federal employees when they have a tax delinquency. So when we're talking about fairness, again, we're talking about the Federal employee, and then we're talking about everybody else.

So with that, Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the distinguished lady from the District of Columbia (Ms. Norton).

Mr. Speaker, I yield the gentlelady an additional 30 seconds.

Mr. Speaker, I yield 2 minutes to the gentleman from Maryland (Mr. Hoyer).

I yield the gentleman an additional 1\1/2\ minutes.

Mr. Speaker, may I ask how much time we have remaining?

I yield 1\1/2\ minutes to the gentleman from Pennsylvania (Mr. Cartwright).

I yield 1 minute to the gentleman from California (Mr. Cardenas).

I yield 1 minute to the gentlelady from California (Ms. Speier).

Mr. Speaker, how much time do I have left?

I yield that 2\1/2\ minutes to the gentleman from Virginia (Mr. Moran).

I yield the remaining time to the gentleman from Virginia (Mr. Moran).

I thank the gentleman for yielding.

Mr. Speaker, I adopt the remarks that were made by Ms. Norton. The delinquency rate of Federal employees is far below what it is for other employees on a general level throughout this country. I adopt the gentlelady's remarks that, yes, this is April 15, and my own staff has said, oh, I had to pay this, that, or the other.

The implication here is that we brought a bill dealing with Federal employees this day. Why? Because Federal employees are very easy to target. For people who don't like government: Well, the Federal employees, look at what they're doing. You're having to pay your taxes today before those deadbeat Federal employees. That's the message here.

Now, if this were a problem that you really wanted to deal with, it wouldn't have to be April 15. It could have been February 15 or it could be June 15. But, no, that's not the message here.

The message is that somehow Federal employees need to be targeted. I understand they work for us, and so they're easy to get at. And we are getting at them almost every week. We're furloughing them. We're suggesting they pay more, that they're not paying enough for retirement. We are suggesting that somehow they're less than stellar employees.

But before I conclude, let me take a second look at this.

We had a tragic event happen in Boston today, and the President was quick to call Governor Deval Patrick and say we're going to send some Federal employees from the FBI, the ATF, and other agencies to make sure that we look at this and protect America.

We extend our sympathies, of course, to all the victims and their families.

We express our sympathies to all of them, and we recognize that they have some employees in Boston and around this country at the municipal and State level, and, yes, at the Federal level, who are going to try to respond and make sure America is safe.

Let's send a message to those Federal employees, because they're our employees, that we respect them, their contribution. Let us not bring a bill to the floor--by the way, the gentleman is correct that it passed here not with my vote last year, because I thought it was a message that was incorrect. I thought that there were processes in place today which allow us to act against those, yes, who are tax delinquents. But very frankly, this is not a discussion today about huge tax delinquents, huge tax frauds, people who are not paying taxes to this country in which they're being so successful.

So, Mr. Speaker, first of all, we send our regrets to those who have been the subject of a terrorist act, whether it was a domestic terrorist, a foreign terrorist, but a terrorist act this day.

Secondly, we say to those Federal employees who time after time, week after week, month after month are being disparaged by their board of directors, that we understand the quality of their service and contribution. And, yes, we understand there are some who don't do what they ought to do, and we demand that they do so, but this is not the way to do it.

Mr. Speaker, I strongly believe that all Americans, particularly Federal workers, should pay their taxes in full and on time, period. Fortunately, according to the most recent tax compliance statistics from the Internal Revenue Service (IRS), the vast majority of Federal workers, more than 96 percent, pay their taxes in full and on time.

This admirable compliance rate is especially impressive when considering that the Nation's overall compliance rate is approximately 83 percent. Further, with an average delinquency rate for Federal employees of 3.3 percent, compared to an average delinquency rate of 7.4 percent for all American taxpayers, it is clear that our dedicated civil servants take their tax obligations seriously. In addition, for the small minority of Federal employees who fall behind on their taxes, the causes of financial hardship are not unique to Federal workers, but similar to the challenges and circumstances facing many middle class American families who find themselves temporarily unable to meet their tax obligations as a result of life-changing hardships, such as a divorce, serious illness, or a spouse losing a job.

Simply put, H.R. 249 is a solution in search of a problem.

The Congressional Budget Office cost estimate found that implementing H.R. 249 will cost taxpayers $1 million in 2014 and about

$500,000 in subsequent years, since it will not enhance revenues. Although it may seem counterintuitive that the so-called ``Federal Employee Tax Accountability Act'' would increase the deficit, it is logical when one considers current law. Presently, the law provides for a hierarchy of penalties based on the seriousness and willfulness of the offense related to improperly filing a tax return, and it provides IRS the authority to garnish wages to recoup owed taxes from employees.

H.R. 249 would replace this system with an inflexible mandate to fire any Federal employee with an outstanding tax debt to the Federal Government for which a public lien has been filed. If my Republican colleagues are so concerned about tax delinquency, then why not use the $1 million cost of this legislation to hire additional IRS enforcement agents to chip away at our Nation's net tax gap of approximately $385 billion?

We recently held a hearing where the head of the U.S. Government Accountability Office stated that the tax gap is the single largest item we can address to achieve savings. Could it be that actually recognizing such valuable work does not fit neatly with their negative narrative of the Federal workforce? Spending more than $1 million to implement H.R. 249, which only targets our country's civil servants and does nothing to address our Nation's $385 billion tax gap, is neither a prudent nor wise policy response. I urge all Members to oppose this legislation.