Announcing a new directive today aimed at ensuring that companies with serious tax delinquencies don't win new federal contracts, President Obama had harsh words for “deadbeat” company owners, singling out one guy who “owed over $1 million in taxes and was paid over $1 million as a defense contractor — and instead of using that money to pay his back taxes, he chose to buy a boat, some cars, and a home abroad with his earnings.
“It is simply wrong for companies to take taxpayer dollars and not be taxpayers themselves,” Mr. Obama added.
Companies bidding on federal contracts are already required to certify their nondelinquency as part of the process, but apparently nobody has been certifying the certifications. Now the President wants the IRS to review the accuracy of companies' claims: “We need to be sure that when a company says it's paying taxes, that company is, in fact, paying taxes.”
Sounds like a reasonable idea, given that an estimated $5 billion in unpaid taxes is at stake, according to the President's directive.
It's not like these firms are struggling in the current tough economic environment. Government contracting is definitely still a growth industry, according to a Grant Thornton study released this week. Half of contractors reported revenue increases from federal business in 2009; only 20 percent reported a decrease. ###