According to Devin Dwyer of ABC news contractors and vendors who owed federal Taxes were awarded $24 billion in stimulus funds from the Recovery Act.
A non-partisan watchdog group released their findings on Tuesday. The report stated that 3,700 recipients of stimulus money owed the up to $750 million in unpaid taxes as of September 2009, either through corporate taxes or payroll taxes. The report likely underestimates the actual number of contractors who cheat in their taxes
Federal law doesn’t require their agencies to check tax compliance of people requesting stimulus funds. The report outlines the improprieties of 15 different companies. One security company took $100,000 in funding while it owed $9 million in taxes and paid other creditors instead of its tax bill. One healthcare non-profit owes $4 million on taxes and repeatedly writes bad checks for their tax bills.
Senator Tom Coburn of Oklahoma says “this should be a wakeup call for Congress.” There should be no doubt that the tax code is in serious need of revision, especially if tax cheats are given federal funds.
Tax cheats are nothing new but taking funds from the government while refusing to pay taxes is unfair to law-abiding taxpayers who often hire tax attorneys to help them with their tax bills. Unpaid tax bills result in heavy fines that make it impossible to pay. Retaining a tax lawyer may make it possible to reduce penalties and fines. An experienced tax attorney knows the tax laws that can protect a person or business from harassing collections.
