Some 215,000 federal government employees failed to pay their federal taxes in 2024, and the collective tab has reached $2.1 billion, according to a report released by the Treasury Inspector General for Tax Administration.
The delinquency figure represents 6.9% of the total federal civilian workforce. The inspector general said the problem is getting worse, not better.
About 50,000 of those employees failed to file tax returns in multiple years. More than 1,000 federal workers failed to file returns at least six consecutive times during their careers.
“While all taxpayers have a responsibility to file appropriate tax returns and pay taxes as they become due, federal employees have a higher responsibility to satisfy in good faith their obligations as citizens,” the inspector general said in the report.
The U.S. Postal Service posted the worst numbers of any federal agency, with a 10% delinquency rate among its workers and an outstanding balance of $570 million in unpaid taxes. The Department of Veterans Affairs reported a 7.3% delinquency rate, with employees owing nearly $380 million. Civilian Department of Defense employees also exceeded a 7% delinquency rate. The Department of Homeland Security came in above 5%.
The numbers grow substantially when retired federal workers are included. Combining current and former federal employees, the inspector general found 571,000 delinquent filers owing a combined $6.3 billion to the IRS. That total is up 43% over just three years.
The IRS attributed part of the rise to the pandemic, saying it suspended collection notices and levy programs during the recovery period. The agency began phasing those programs back in August 2024.
The IRS sent 427,000 reminder letters to federal employees and retirees last summer. The agency says roughly 59,000 recipients made payments totaling $58 million in response.
“While these outcomes cannot be attributed solely to the notice, the results suggest targeted outreach can be effective and will inform future compliance strategies,” said Lia Colbert, commissioner of the IRS small business and self-employed division.
The inspector general also identified serious enforcement gaps. Auditors flagged 102 cases in which a federal employee had at least eight years of earned income but filed no tax return. Twenty cases involved employees who had gone nine years or longer without filing.
None of those 102 cases had been referred to the IRS Criminal Investigation division as of late last year. The inspector general made the referrals directly.
