National security employees owe $730 million in back taxes

The Government Accountability Office (GAO), the congressional non-partisan watchdog agency, discovered that national security workers with high-level security clearance owe millions in unpaid taxes. In fact, nearly one-third (31 percent) of those workers already maintained tax indebtedness when they were provided with security clearances.

It is estimated in the new report (PDF) that more than 80,000 contractors and workers with security clearances at the Department of Defense owe approximately $730 million in back taxes as of Jun. 2012.

According to the GAO, there currently isn’t a restriction on providing a tax delinquent worker with access to important information. However, it did note that such a situation does actually “pose a potential vulnerability.” The reason why is because someone who may be overextended in their financial obligations may participate in illicit activities to gain access to sufficient funds.

“DOD officials stated that individuals having access to classified information pose a greater risk because they have more opportunity to actually compromise classified information than a person who is only eligible to access classified information,” the report said.

Moreover, it is recommended that it should be part of the overall review process. In the meantime, the GAO stated that the Office of the Director of National Intelligence, the Treasury Department and the Office of Personnel Management are all sifting through options for distinguish if applicants owe taxes. Federal laws prohibit the Internal Revenue Service from disclosing private taxpayer information to other agencies.

The Pentagon has pledged to undergo a complete overhaul of its screening process. One part of the Pentagon’s mission to reduce the number of employees who have security clearances by at least 10 percent.

Oklahoma Republican Senator Tom Coburn told the Washington Post that the current policy in place is “unwise and risky.”

“Giving security clearances to individuals who fail to follow the law is unwise and risky,” said Sen. Coburn, who announced he will retire at the end of his current term. “Federal tax cheats with security clearances jeopardize both our national and economic security, and could unnecessarily put our nation’s classified information at risk.”

He added in an interview with The Hill that the U.S. must put in place safeguards in order to avoid compromising the nation’s security and suggested that all federal employees must follow the same rules that millions of other Americans do.

This isn’t the first time that the federal public sector workforce has been put under scrutiny in regards to back taxes. We reported in May that the IRS discovered more than 318,000 federal workers and retirees owed $3.8 billion in back taxes, a 2.6 percent increase from the year prior. The average tax bill is $10,391.

The highest rates of tax delinquency are concentrated in the National Council on Disability (11.54 percent), the Committee for Purchase from People Who Are Blind (10 percent) and the Civil Rights Commission (9.52 percent). The Treasury Department maintained the lowest percentage of tax delinquents in the federal government.