GAO Report on Tax-Owing Stimulus Contractors

Press Release

Billions of dollars in stimulus funds went to contractors and grantees who owed the government hundreds of millions of dollars in tax debts, according to a new report from the Government Accountability Office. Sen. Chuck Grassley, a requester of the report, made the following comment on the report, which is the subject of a hearing today of the Senate Permanent Subcommittee on Investigations. Grassley is a senior member and former chairman and ranking member of the Finance Committee, with jurisdiction over tax policy.

"Many companies pay their taxes, so there's no reason for the government to deal with companies that don't. The businesses that should be excluded first from government business are those that have tax debts outstanding over several years and haven't done anything to try to pay off the debt. A substantial amount of the estimated unpaid federal taxes owed by stimulus program contractors are in this category. A government contract is something to be earned, not something to be taken for granted. The Administration has at least two rules in place to address this problem, but it's not clear whether the rules are being used. This problem has come up before. Congress needs to figure out how to fix it. The Senate Finance Committee has considered this. It's good that the committee with jurisdiction over government contracts is looking at it, too."

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