H.R. 882: The Contracting and Tax Accountability Act of 2013

H.R. 882

The Contracting and Tax Accountability Act of 2013

Date
April 15, 2013 (113th Congress, 1st Session)

Staff Contact
Communications

Floor Situation

On Monday, April 15, 2013, the House is scheduled to consider H.R. 882, The Contracting and Tax Accountability Act of 2013,under a suspension of the rules. The bill was introduced on February 28, 2013 by Rep. Jason Chaffetz (R-UT) and referred to the Committee on Oversight & Government Reform, which held a mark-up and reported the bill by voice vote.

Bill Summary

H.R. 882 provides that any person (defined as an individual, partnership, or corporation) that has seriously delinquent tax debts shall be ineligible for receiving Federal contracts or grants above the simplified acquisition threshold, currently set at $150,000.  The bill requires any person applying for a contract or grant with the Federal government to submit a form certifying that they do not have a seriously delinquent tax debt, and authorizes the Secretary of the Treasury to disclose relevant information to the agency head.  H.R. 882 also requires the heads of executive agencies to propose persons for debarment if: (1) their application for a federal contract includes a certification that they have a seriously delinquent tax debt; or (2) the agency head receives information from the Secretary of the Treasury showing that the applicant’s certification form is false.  The debarment process may be waived, however, if the head of the executive agency provides a written finding to Congress of “urgent and compelling circumstances significantly affecting the interests of the United States.”

The bill defines seriously delinquent tax debts as, “an outstanding debt under the Internal Revenue Code of 1986 for which a notice of lien has been filed in public records…”  Tax debts are excepted if: (1) debts are being paid in a timely manner; or (2) a collection due process hearing has been requested or is pending.  Also, H.R. 882 specifies that the term ‘person’ does not include an individual seeking assistance through a grant entitlement program.

Background

Most taxpayers file accurate tax returns and pay the taxes they owe punctually, regardless of their income.  Federal contractors and grantees should do the same.  The federal government spends more than $1 trillion in contracts and grants annually (in fiscal year 2012, $514 billion in contracts and $536 billion in grants), and that money should be going to responsible businesses and individuals.

The Contracting and Tax Accountability Act of 2013 addresses this issue by prohibiting individuals, partnerships or companies with seriously delinquent tax debt, who are not making a good faith effort to pay their taxes or dispute them, from receiving federal contracts or grants.

Cost

CBO estimates that H.R. 882 would “increase administrative costs government-wide by less than $500,000 annually, assuming the availability of appropriated funds,” and because of the potential to “affect direct spending by agencies not funded through annual appropriations,” pay-as-you-go procedures apply.