1,168 IRS Contractors Owe Taxes

In high school if you hang out with the “wrong crowd” you can acquire an unwanted label and perhaps an unwarranted reputation.  It’s funny how many high school parallels we find in the adult world.  Associating with the wrong business partners can also cause serious damage to your reputation and credibility.  If you continue to do business with unethical people, then it is not too much of a stretch to assume that you are guilty of similar unethical practices.

The IRS knows a little about this.  According to a recent TIGTA audit report, 1,168 IRS vendors owed back taxes totaling $589 million as of July 2012.  Now to be fair, the IRS screens the companies it intends to award contracts to, and the IRS will not work with them if they owe taxes.  However, they do not have a system in place for continued monitoring after the contract has been awarded.  Also, to be fair to these vendors, owing back taxes is not necessarily dishonest or unethical.  In fact, in my experience, most people that owe taxes are good citizens and businesses that have made honest mistakes, procrastinated, and/or that have fallen on hard times.

The statistics aren’t really as bad as they appear because there is one contractor who is responsible for a whopping $525 million.  Still, this is something that the IRS really needs to monitor closely.  We know how increasingly important public trust has become at the nation’s most troubled agency.