A recent report reveals that one in ten companies contracting with the U.S. General Services Administration owes unpaid federal taxes. Congressional investigators say the companies currently owe a total of at least $1.5 billion. An Associated Press report says that number could be too low. Evidence was found that 25 contractors had diverted payroll taxes for personal or business use. While investigators studied contracts from October 2003 through June 2005, they did not examine contractors who didn’t file tax returns or underreported income. Investigators told Associated Press that the government is not required to consider a company’s tax debt when awarding a contract. They say contracts can be awarded even if a company willfully fails to pay taxes. Actually, some of the activities related to the failure to pay taxes could be criminal. If a company owes unpaid taxes to the government, I don’t believe that company should be on a government bid list. At the very least, there should be some type restrictions put in place to limit their ability to bid.

Source: Associated Press

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