Senate Panel Probes Contractors Over Taxes

[Judi Lynn]

Senate Panel Probes Contractors Over Taxes
By MARY DALRYMPLE, AP Tax Writer

Tuesday, March 14, 2006

(03-14) 09:05 PST WASHINGTON, (AP) --

In one case, a communications equipment contractor got $100,000 in federal payments while owing nearly $900,000 in unpaid taxes. The owner had been convicted of money laundering.

In another, a security services company got $100,000 while owing more than $3 million, mostly in payroll taxes. The owner had several commercial properties and a yacht.

The Senate Homeland Security and Governmental Affairs Permanent Subcommittee on Investigations looked Tuesday into these and other examples of General Services Administration contractors getting federal payments while avoiding federal taxes, asking how the government can prevent tax offenders from getting federal business.
(snip)

"One of the main problems here is that contractors are being allowed into the system in the first place and are being awarded contracts even though they owe taxes," said Sen. Carl Levin, D-Mich.
(snip/...)

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2006/03/14/national/w090505S72.DTL

[sui generis]

1. owing federal tax is not the same thing as being a tax offender

But the government contracting process should be weeding out real offenders anyway.

They run all company owners and employees of a federal contract up against that criteria - no federal tax liens, no defaulted student or small business administration loans, etc.

Somebody is not doing their spelled-out job if there are real defaulting tax offenders receiving money from the government.