Over 42,000 Federal Employees Caught Cheating on Taxes, Owing $1.5 Billion in Unpaid Taxes

An audit by the Treasury Inspector General for Tax Administration has revealed that over 42,000 federal employees have failed to file their taxes with the IRS repeatedly, The Washington Times reports.

This group of individuals, known as “federal employee nonfilers,” has been deemed particularly concerning since they are paid by taxpayer money but have been shirking taxpayer obligations.

According to the audit, the IRS allocates little effort toward targeting federal nonfilers.

Moreover, due to legal limitations, the IRS is restricted in sharing information with other federal agencies that may prompt or penalize delinquent employees.

As of 2021, these delinquent federal employees owed a total of $1.5 billion in unpaid taxes.

TIGTA discovered that tax compliance among federal employees has been declining in recent years.

In 2017, only 108,000 employees were delinquent in filing or paying taxes.

However, in 2021, this number had increased to 149,000 cases, which translates to a delinquency rate of approximately 5%.

More significantly, the audit identified 42,047 employees who missed multiple years of filing or payment over the review period, accounting for about 1.5% of federal employees.

Moreover, over 100 employees were delinquent for at least eight years.

Most of the nonfilers were individuals who earned less than $100,000, though 738 of them earned more than $200,000.

Despite their repeated failure to comply with tax obligations, most of these delinquent employees have evaded punishment.

Only 28 federal nonfilers were subject to civil penalties, while the number of cases referred for criminal investigation was redacted in the audit report.

The postal service had the most offenders, with more than 9,000 employees who missed at least two years.

The Veterans Affairs Department was the runner-up with nearly 6,600 employees, while the Defense Department and service branches combined for roughly 13,000 cases.