[Congressional Record (Bound Edition), Volume 158 (2012), Part 9]
[House]
[Pages 12817-12820]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  1600
            FEDERAL EMPLOYEE TAX ACCOUNTABILITY ACT OF 2012

  Mr. CHAFFETZ. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 828) to amend title 5, United States Code, to provide that 
persons having seriously delinquent tax debts shall be ineligible for 
Federal employment, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 828

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Federal Employee Tax 
     Accountability Act of 2012''.

     SEC. 2. INELIGIBILITY OF PERSONS HAVING SERIOUSLY DELINQUENT 
                   TAX DEBTS FOR FEDERAL EMPLOYMENT.

       (a) In General.--Chapter 73 of title 5, United States Code, 
     is amended by adding at the end the following:

``SUBCHAPTER VIII--INELIGIBILITY OF PERSONS HAVING SERIOUSLY DELINQUENT 
                    TAX DEBTS FOR FEDERAL EMPLOYMENT

     ``Sec. 7381. Definitions

       ``For purposes of this subchapter--
       ``(1) the term `seriously delinquent tax debt' means an 
     outstanding debt under the Internal Revenue Code of 1986 for 
     which a notice of lien has been filed in public records 
     pursuant to section 6323 of such Code, except that such term 
     does not include--
       ``(A) a debt that is being paid in a timely manner pursuant 
     to an agreement under section 6159 or section 7122 of such 
     Code;
       ``(B) a debt with respect to which a collection due process 
     hearing under section 6330 of such Code, or relief under 
     subsection (a), (b), or (f) of section 6015 of such Code, is 
     requested or pending;
       ``(C) a debt with respect to which a levy has been issued 
     under section 6331 of such Code (or, in the case of an 
     applicant for employment, a debt with respect to which the 
     applicant agrees to be subject to a levy issued under such 
     section); and
       ``(D) a debt with respect to which relief under section 
     6343(a)(1)(D) of such Code is granted;
       ``(2) the term `employee' means an employee in or under an 
     agency, including an individual described in sections 2104(b) 
     and 2105(e); and
       ``(3) the term `agency' means--
       ``(A) an Executive agency;
       ``(B) the United States Postal Service;
       ``(C) the Postal Regulatory Commission; and
       ``(D) an employing authority in the legislative branch.

     ``Sec. 7382. Ineligibility for employment

       ``(a) In General.--Subject to subsection (c), any person 
     who has a seriously delinquent tax debt shall be ineligible 
     to be appointed or to continue serving as an employee.
       ``(b) Disclosure Requirement.--The head of each agency 
     shall take appropriate measures to ensure that each person 
     applying for employment with such agency shall be required to 
     submit (as part of the application for employment) 
     certification that such person does not have any seriously 
     delinquent tax debt.
       ``(c) Regulations.--The Office of Personnel Management, in 
     consultation with the Internal Revenue Service, shall, for 
     purposes of carrying out this section with respect to the 
     executive branch, promulgate any regulations which the Office 
     considers necessary, except that such regulations shall 
     provide for the following:
       ``(1) All due process rights, afforded by chapter 75 and 
     any other provision of law, shall apply with respect to a 
     determination under this section that an applicant is 
     ineligible to be appointed or that an employee is ineligible 
     to continue serving.
       ``(2) Before any such determination is given effect with 
     respect to an individual, the individual shall be afforded 
     180 days to demonstrate that such individual's debt is one 
     described in subparagraph (A), (B), (C), or (D) of section 
     7381(a)(1).
       ``(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.
       ``(d) Reports to Congress.--The Director of the Office of 
     Personnel Management shall report annually to Congress on the 
     number of exemptions made pursuant to subsection (c)(3).

     ``Sec. 7383. Review of public records

       ``(a) In General.--Each agency shall provide for such 
     reviews of public records as the head of such agency 
     considers appropriate to determine if a notice of lien (as 
     described in section 7381(1)) has been filed with respect to 
     an employee of or an applicant for employment with such 
     agency.
       ``(b) Additional Requests.--If a notice of lien is 
     discovered under subsection (a) with respect to an employee 
     or applicant for employment, the agency may--
       ``(1) request that the employee or applicant execute and 
     submit a form authorizing the Secretary of the Treasury to 
     disclose to the head of the agency information limited to

[[Page 12818]]

     describing whether the employee or applicant has a seriously 
     delinquent tax debt; and
       ``(2) contact the Secretary of the Treasury to request tax 
     information limited to describing whether the employee or 
     applicant has a seriously delinquent tax debt.
       ``(c) Authorization Form.--The Secretary of the Treasury 
     shall make available to all agencies a standard form for the 
     authorization described in subsection (b)(1).
       ``(d) Negative Consideration.--The head of an agency, in 
     considering an individual's application for employment or in 
     making an employee appraisal or evaluation, shall give 
     negative consideration to a refusal or failure to comply with 
     a request under subsection (b)(1).

     ``Sec. 7384. Confidentiality

       ``Neither the head nor any other employee of an agency 
     may--
       ``(1) use any information furnished under the provisions of 
     this subchapter for any purpose other than the administration 
     of this subchapter;
       ``(2) make any publication whereby the information 
     furnished by or with respect to any particular individual 
     under this subchapter can be identified; or
       ``(3) permit anyone who is not an employee of such agency 
     to examine or otherwise have access to any such 
     information.''.
       (b) Clerical Amendment.--The analysis for chapter 73 of 
     title 5, United States Code, is amended by adding at the end 
     the following:

``SUBCHAPTER VIII--INELIGIBILITY OF PERSONS HAVING SERIOUSLY DELINQUENT 
                    TAX DEBTS FOR FEDERAL EMPLOYMENT

``7381. Definitions.
``7382. Ineligibility for employment.
``7383. Review of public records.
``7384. Confidentiality.''.

     SEC. 3. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect 9 months after the date of enactment of this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Utah (Mr. Chaffetz) and the gentlewoman from New York (Mrs. Maloney) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Utah.


                             General Leave

  Mr. CHAFFETZ. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and include extraneous materials on the bill under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Utah?
  There was no objection.
  Mr. CHAFFETZ. I yield myself such time as I may consume.
  Mr. Speaker, almost every Federal employee that I have run into, 
they're good, hardworking, patriotic people trying to do the right 
thing; but unfortunately we have a few that really aren't doing the 
right thing.
  I want to highlight a problem that we see out there. There are those 
Federal employees that are delinquent on their Federal taxes. Now, this 
becomes egregious, I think, because of the nature of their employment--
they're working for the Federal Government, they're being paid by the 
Federal taxpayers, and yet they're not paying their own Federal taxes.
  Unfortunately, over the course of time this situation has not gotten 
better. People are dealing with very difficult situations, they have 
adopted something or somehow in their life they've gotten upside down. 
The nature and the spirit of this bill, the bill that I am the chief 
sponsor on, is to find those people who are trying to do the right 
thing--they're trying to rectify it, they're trying to come up with a 
plan--we're not going after those people. But for the other group of 
people who are just totally ignoring the law and they're not living up 
to their obligation, they're not paying their Federal taxes, there 
ought to be more of a consequence.
  The number of delinquent employees has remained fairly consistent 
since the year 2004. Remarkably, there were 102,794 employees who were 
delinquent with their Federal taxes back in 2004. Fast forward to 2010, 
that number is still 98,291. In fact, nearly 700 people on Capitol Hill 
are delinquent on their Federal taxes. Unfortunately, the dollar amount 
of these delinquencies from 2004, which was $599.8 million, has grown 
to over $1 billion--in fact, it's $1.034 billion unpaid taxes from 
Federal employees.
  So, 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 seriously delinquent tax 
debt from Federal civilian employment. This should be common sense, and 
I hope it's bipartisan.
  Most taxpayers, including government employees, file accurate tax 
returns and pay the taxes they owe on time, regardless of their income. 
Federal employees and individuals applying for Federal employment 
should do the same--always.
  In 2010, the most recent year for which the IRS data is available, 
more than 98,000 civilian Federal employees owed more than $1 billion 
in taxes. The average delinquency rate for Federal civilian employees 
was 3.33 percent, up from 2.29 percent in 2008.
  The vast majority of Federal workers who owe taxes owe them from 
income that they earned. The intent of this bill is simple. If you're a 
Federal employee or an applicant for Federal employment, you should be 
making a good faith effort to pay your taxes or to dispute them, as 
taxpayers have the right to do.
  Under this bill, H.R. 828, individuals having seriously delinquent 
tax debts are ineligible for Federal civilian employment in the 
executive and legislative branch. ``Serious tax delinquent'' is defined 
as an outstanding Federal debt for which the notice of lien has been 
filed publicly.
  H.R. 828 exempts employees who are working to settle tax liabilities 
by excluding Federal tax debts that are being paid in accordance with 
an installment agreement, offer of compromise, or wage garnishment; for 
which a due process hearing or request for relief from joint and 
several liability is requested or pending; or for which relief has been 
granted. So, there are exceptions. We're not trying to cut somebody off 
at the knees if they're trying to do the right thing.
  The bill requires individuals applying for Federal jobs to certify 
that they are not seriously delinquent in their taxes. Agencies will 
also conduct periodic reviews of public records for tax liens. And 
individuals with seriously delinquent tax debt may avail themselves of 
existing due process rights, including before the Merit Systems 
Protection Board. In addition, individuals will have 6 months to 
demonstrate that their tax debt is not ``seriously delinquent.''
  The bill also provides a financial hardship exemption for employees. 
Federal employees are called to account for paying taxes by the code of 
ethics for the executive branch. The code of ethics dictates that 
Federal employees must ``satisfy in good faith their obligations as 
citizens, including all just financial obligations, especially those 
such as Federal, State or local taxes that are imposed by law.'' Thus, 
the necessity of this situation. Unfortunately, it's getting worse, 
it's not getting better.
  We have an obligation, I think, to the American taxpayers and to the 
overwhelming majority, the 96-plus percent of Federal workers, who are 
doing the right thing. Thus, I urge the adoption of this bill.
  I reserve the balance of my time.
  Mrs. MALONEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, as Chairman Issa stated during the Oversight Committee's 
consideration of this bill, H.R. 828, this is largely a symbolic 
gesture.
  We all agree that everyone, including Federal workers, should pay 
their taxes. Members on both sides of the aisle emphasize the need to 
hold Federal employees accountable for tax obligations. However, the 
overwhelming majority of Federal workers take their income tax 
obligation seriously.
  The tax compliance rate for Federal employees is much higher than for 
the American public. According to the most recent statistics from the 
Internal Revenue Service, more than 96 percent of Federal workers pay 
their taxes on time and do not owe money to the government.
  In addition, there are already existing laws and regulations that 
address tax debts owed by Federal employees,

[[Page 12819]]

and the IRS has a system in place for levying up to 15 percent of 
Federal wage payments made to delinquent taxpayers until the tax debt 
is satisfied.
  The Joint Committee on Taxation has concluded that H.R. 828 would 
have ``negligible impact'' on revenue. In fact, implementation of the 
bill would have a small cost. So, I'm not certain that this bill will 
have any significant impact whatsoever.
  I strongly believe that the House's efforts and energy would be 
better spent by focusing on measures to strengthen the Federal civil 
service and improve the efficiency and effectiveness of the Federal 
Government rather than by making symbolic gestures that reinforce a 
negative view of the Federal workforce.
  I reserve the balance of my time.
  Mr. CHAFFETZ. Mr. Speaker, I yield myself such time as I may consume.
  There is a need for this. I wish there wasn't a need for this. There 
are other more pressing things that we should be focused on. But this 
is $1 billion in uncollected taxes, taxes that are due by Federal 
workers.
  Again, I don't want to disparage the reputation of all Federal 
employees, but this small group--in excess now of 3 percent of our 
Federal workers--is putting tarnishment on those other employees.
  I want to point to a January 23, 2012, Federal Eye article--Ed 
O'Keefe is the author. Let me read a paragraph from his article. He 
said:

       But on Capitol Hill, 684 employees, or almost 4 percent, of 
     the 18,000 congressional staffers owed taxes in 2010, a jump 
     of 46 workers from 2009. Four percent of House staffers owed 
     $8.5 million, and 3 percent of Senate employees owed $2.1 
     million, the IRS said.

  We actually get a report from the IRS, and it has a breakdown of the 
number of employees by department who aren't paying their Federal 
taxes. The Department of Treasury, they have one of the lowest 
percentages. Less than 1 percent of their employees don't pay their 
taxes, but they still have 1,181 employees at the Department of 
Treasury who aren't paying it. There's an uncollected $9.3 million.
  At the Federal Reserve, the Board of Governors, smaller in terms of 
their numbers, but you still had 91 employees at the Federal Reserve 
not paying their taxes--4.86 percent of their employees not paying over 
$1.2 million in taxes.
  If you go on and look here, this one is my personal favorite. The 
U.S. Office of Government Ethics has the worst compliance rate of our 
Federal workers. If you put that in a movie, you wouldn't believe it. 
But nearly 6.5 percent of their employees don't pay their Federal 
taxes, the U.S. Office of Government Ethics.

                              {time}  1610

  Unfortunately, there is a need for this.
  I would like to highlight, we did this in a very bipartisan way 
within committee. There was an amendment offered by Mr. Lynch of 
Massachusetts, who I have the greatest respect for. He offered an 
amendment. We accepted that. When we accepted that, he was quoted as 
saying, and I quote from Mr. Lynch:

       With that refinement here, a friendly amendment, I 
     certainly would vote for the bill if the amendment were 
     included.

  I hope we can do this in a bipartisan way. We have an obligation, a 
duty to do this.
  I reserve the balance of my time, Mr. Speaker.
  Mrs. MALONEY. Mr. Speaker, I have no additional speakers. I yield 
back the balance of my time.
  Mr. CHAFFETZ. Mr. Speaker, let me say, in conclusion here, look, if 
Federal workers aren't paying their Federal taxes, they should be 
fired. If they're not paying their Federal taxes and they want 
employment here, they should not be employed as Federal workers.
  We have a duty and an obligation. This is a billion dollar problem in 
search of a solution. This is the solution. We should do so in a 
bipartisan way.
  And with that, I urge the adoption of this bill.
  I yield back the balance of my time.
  Mr. VAN HOLLEN. Mr. Speaker, once again the House finds itself 
considering a bill that unfairly targets the hard working public 
servants who every day are providing a wide array of public services 
from helping to nurse our wounded veterans, to discovering cures and 
treatments for diseases that plague millions of American families, to 
ensuring aviation safety, to protecting our borders, public safety and 
the food supply. Over the last two years, our Republican colleagues 
have repeatedly brought legislation to the floor to slash the pay and 
benefits of civil servants in order to protect special tax breaks for 
the super wealthy and special interests.
  Obviously, all Americans should pay their taxes, and those who fail 
to do so should be penalized. But federal employees should not be 
denied the full complement of due process rights that are available to 
any other American. This bill would result in the firing of federal 
employees who may be legitimately contesting a tax liability through 
the established process. Moreover, by linking the firing of a federal 
employee to a lien, this bill would result in the firing of individuals 
who are already in the process of satisfying their tax obligation. 
There are already laws and regulations on the books that address how 
tax debt should be handled and how federal employees who are delinquent 
on their payments should be disciplined.
  In 2002, the IRS asked Congress to change the standard for 
determining when an agency was mandated to fire employees. Rather than 
firing every employee who fails to properly file their tax return, IRS 
created a hierarchy of penalties based on the seriousness and 
willfulness of the offense. This bill throws out that process and 
treats all delinquencies as if they were willful and deliberate.
  Comparatively, federal employees have a compliance rate that is 
higher than the average American taxpayer. In 2010, 3.35 percent of 
federal employees were delinquent in their tax payments. That same 
year, the delinquency rate for the total universe of American taxpayers 
was 7.4 percent. Instead of making public servants the target of new, 
unnecessary and unfair legislation, we should instead be focusing on 
uniform ways to strengthen and better enforce existing laws and 
regulations governing tax delinquency.
  Ms. McCOLLUM. Mr. Speaker, the bill before us today makes any person 
who has a seriously delinquent tax debt ineligible for federal 
employment or to continue serving as a federal employee. I will vote 
for this bill because I strongly believe that all Americans, including 
federal employees, should meet their legal tax obligations. However, 
this bill is an unnecessary distraction from the urgent problems facing 
Congress because there is no evidence to show federal employees deserve 
to be targeted for tax non-compliance. In fact, the data shows just the 
opposite.
  The compliance rate of federal employees is much higher than the 
general public according to the most recent statistics from the 
Internal Revenue Service. The IRS says more than 96 percent of federal 
workers paid their taxes in full, on time, and have no outstanding debt 
to the government. This high compliance rate is even more impressive 
considering the families of federal employees have been forced to 
endure repeated pay freezes and benefit reductions in recent years.
  An amendment from my colleague Congressman Lynch of Massachusetts 
improved H.R. 828 by creating a process to ensure federal employees who 
are making a good faith effort to pay their tax debt or those suffering 
financial hardship are not unfairly targeted or dismissed. Still, the 
provisions of H.R. 828 will result in few new dollars going into the 
federal Treasury because federal employees are already the model for 
American taxpayers, not the problem. If House Republicans were 
genuinely concerned with improving tax compliance this body would be 
voting on legislation to close tax loopholes and tax shelters exploited 
by some of the nation's wealthiest individuals and corporations to 
avoid paying tens of billions of dollars every year.
  The best course of action for this House would be to set this purely 
symbolic, politically-motivated legislation aside so we can focus on 
legislation that creates jobs and helps to grow the economy.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Utah (Mr. Chaffetz) that the House suspend the rules and 
pass the bill, H.R. 828, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. CHAFFETZ. Mr. Speaker, on that I demand the yeas and nays.

[[Page 12820]]

  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

                          ____________________