It’s been frigid in Minnesota, all right, but an audit report from Washington, D.C., had me steaming this week.
The U.S. Treasury Department’s Inspector General discovered that 1,168 vendors doing business with the Internal Revenue Service actually were delinquent in federal taxes. Together, those companies accounted for $589 million in unpaid taxes, and only $2 million worth of taxes from 50 vendors were part of payment schedule. One vendor alone apparently owed $525 million! (The contractor was not named in the report.)
How could IRS not find that $525 million error? That was inexcusable!
Until October 2011, the IRS could – and did – balk at checking contractors each year for tax compliance because there was no law explicitly allowing the agency to screen out tax violators that way. Congress banned federal contracts to them with a law effective in fiscal year 2012, which began that October.
Most payments made by IRS apparently were under existing contracts. But auditors also found that the tax enforcement agency awarded $2.6 million worth of new or extended contracts to three vendors, who actually had been suspended from government work for tax reasons.
Although the system of controls appeared to be effective, “(The Treasury Inspector General for Tax Administration) found insufficient oversight and a lack of monitoring over operation and maintenance of the file, which contains information about vendors,” a Treasury announcement said.
For its part, the IRS accepted all of the Inspector General’s recommendations for finding vendors that owe Uncle Sam. Those contractors represented about 7 percent of 16,907 vendors dealing with IRS on July 2, 2012,
What’s irritating is the lack of oversight. It’s “Do as I say, not as I do!”
My personal and business taxes have to be current to renew my (Enrolled Agent) license, which is overseen by IRS, so why don’t the vendors? Why aren’t vendors of IRS held to a higher standard?