Overseas Civilian Contractors

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Two senators target government contractors with back taxes

USA Today  March 8, 2012

WASHINGTON – The Pentagon should garnish payments made to defense contractors who fail to pay their federal income taxes, say a bipartisan pair of senators in a letter sent to Defense Secretary Leon Panetta.

Sens. Tom Carper, D-Del., and Tom Coburn, R-Okla., cited a Feb. 29 USA TODAY report about the growth in Pentagon spending on information operations or propaganda programs.

The article detailed how two owners of Leonie Industries, the Pentagon’s largest such contractor in Afghanistan, owe more than $4 million in unpaid federal taxes since 2006.

Unfortunately, the apparent lack of effective contractor oversight and accountability led to a situation where the Army awarded at least one of these contracts — valued at $20 million — to a company for ‘marketing and media services’ even after the federal government placed a federal tax lien on the company’s two owners for nearly $4.5 million in delinquent federal taxes,” Carper and Coburn wrote in the letter sent Tuesday evening.

Carper is the chairman of the Senate’s Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security, and Coburn is a member of the subcommittee.

“As you know, when U.S. military personnel have delinquent debts, the Department of Defense can be ordered to garnish their wages until these debts have been settled,” Carper and Coburn write. “If our wartime contractors — or any of the Department’s contractors, for that matter — have accumulated sizable tax debts, then we believe that similar action should be taken against these contractors

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March 8, 2012 Posted by | Civilian Contractors, Contractor Oversight, Department of Defense, Taxes | , , , , , , | 1 Comment