U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1 

49–010 

" ! SENATE 113TH CONGRESS

2d Session 

REPORT

2014

113–272 

Calendar No. 596 

AMENDING TITLE 5, UNITED STATES CODE, 

TO PROVIDE THAT PERSONS HAVING 

SERIOUSLY DELINQUENT TAX DEBTS 

SHALL BE INELIGIBLE FOR FEDERAL 

EMPLOYMENT 

R E P O R T 

OF THE

COMMITTEE ON HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

TO ACCOMPANY

S. 1045 

AMENDING TITLE 5, UNITED STATES CODE, TO PROVIDE THAT 

PERSONS HAVING SERIOUSLY DELINQUENT TAX DEBTS SHALL BE 

INELIGIBLE FOR FEDERAL EMPLOYMENT 

NOVEMBER 13, 2014.—Ordered to be printed 


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(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

THOMAS R. CARPER, Delaware Chairman 

CARL LEVIN, Michigan 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

MARK BEGICH, Alaska 

TAMMY BALDWIN, Wisconsin 

HEIDI HEITKAMP, North Dakota 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

RON JOHNSON, Wisconsin 

ROB PORTMAN, Ohio 

RAND PAUL, Kentucky 

MICHAEL B. ENZI, Wyoming 

KELLY AYOTTE, New Hampshire 

GABRIELLE A. BATKIN, Staff Director 

JOHN P. KILVINGTON, Deputy Staff Director 

MARY BETH SCHULTZ, Chief Counsel 

LAWRENCE B. NOVEY, Chief Counsel for Governmental Affairs 

KEITH B. ASHDOWN, Minority Staff Director 

CHRISTOPHER J. BARKLEY, Minority Deputy Staff Director 

ANDREW C. DOCKHAM, Minority Chief Counsel 

JOELLE CANNON, Legislative Aide, Office of Senator Coburn 

LAURA W. KILBRIDE, Chief Clerk 


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Calendar No. 596 

113TH CONGRESS REPORT " ! SENATE 2d Session 113–272 

AMENDING TITLE 5, UNITED STATES CODE, TO PROVIDE 

THAT PERSONS HAVING SERIOUSLY DELINQUENT TAX 

DEBTS SHALL BE INELIGIBLE FOR FEDERAL EMPLOYMENT 

NOVEMBER 13, 2014.—Ordered to be printed 

Mr. CARPER, from the Committee on Homeland Security and 

Government Affairs, submitted the following 

R E P O R T 

[To accompany S. 1045] 

The Committee on Homeland Security and Governmental Affairs, 

to which was referred the bill (S. 1045), to amend title 5, United 

States Code, to provide that persons having seriously delinquent 

tax debts shall be ineligible for Federal employment, having considered the same, reports favorably thereon with amendment in the 

nature of a substitute and recommends that the bill, as amended, 

do pass. 

CONTENTS 

Page 

I. Purpose and Summary .................................................................................. 1 

II. Background and Need for the Legislation ................................................... 2 

III. Legislative History ......................................................................................... 3 

IV. Section-by-Section Analysis of the Bill, as Reported .................................. 4 

V. Evaluation of Regulatory Impact .................................................................. 4 

VI. Congressional Budget Office Estimate ......................................................... 5 

VII. Changes in Existing Law .............................................................................. 6 

I. PURPOSE AND SUMMARY

S. 1045 would make most individuals with seriously delinquent 

federal tax debt—generally defined as a tax debt for which the government has filed a public lien—ineligible to work for the federal 

government. 


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1See Internal Revenue Service, Federal Employee/Retiree Delinquency Initiative (FERDI) Report, 2013. 2 Ibid. Further, a July 2014 report by the Government Accountability Office (GAO)—‘‘Tax 

Debts Owed by DoD Employees and Contractors’’—revealed that about 83,000 Department of 

Defense (DOD) military and civilian employees and contractors who had been determined eligible for secret, top secret, or sensitive compartmented information clearances had unpaid federal 

tax debt totaling more than $730 million as of June 30, 2012. Of these, about 44,500 were DOD 

employees, though the report does not indicate how many of them were military (who would 

not be covered under this bill) and how many civilian (who could be covered under this bill, 

if they have seriously delinquent tax debt and meet other conditions). GAO, ‘‘Security Clearances: Tax Debts Owed by DOD Employees and Contractors,’’ GAO–14–686R, July 28, 2014, at 

pages 10, 16 of the enclosure, http://www.gao.gov/products/GAO–14–686R. 3PL 105–206, section 1203. 

II. BACKGROUND AND NEED FOR THE LEGISLATION

With most federal salaries generally derived from taxes paid by 

the American people, federal workers have a special responsibility 

to meet their tax obligations. The vast majority of federal workers 

do just that. However, some do not. According to the Internal Revenue Service’s (IRS’s) annual Federal Employee/Retiree Delinquency Initiative (FERDI) report for 2013, 116,169 civilian federal 

employees owed $1,084,201,015 in federal back taxes in 2013.1 This 

figure represents a delinquency rate of 4.07%.2

Currently, employees of the Internal Revenue Service can be terminated for having seriously delinquent tax debt.3 S. 1045 requires 

all agencies to adopt this common-sense approach by requiring that 

they notify employees with seriously delinquent tax debt that they 

must immediately repay the debt or enter a repayment program. 

If within 150 days of receiving the notice, the employees have not 

repaid the debt, entered a repayment program, or otherwise offered 

evidence to the agency that their tax debt is not seriously delinquent, the agency will terminate their employment. In a case 

where employment is terminated under the legislation for these 

reasons, the employee may apply for review of the proposed termination under an applicable procedure, appeal, or grievance process 

to which the employee would be entitled generally in the case of 

a proposed termination of the individual’s employment. 

The bill also provides for an exemption, so that, if an individual’s 

employment would otherwise need to be terminated, the head of 

the employing agency may determine, in his or her discretion that 

the individual’s continued service is in the best interests of the 

United States. The making or not making of such a determination 

would not be subject to review. 

S. 1045 also prohibits anyone with seriously delinquent tax debt 

from entering the federal workforce. The legislation requires agencies to ensure that job applicants certify, under penalty of perjury, 

that they do not owe seriously delinquent tax debt as of the date 

that the certification is made. S. 1045 prohibits the agency from 

hiring an applicant who does not make that certification. 

Each agency will also offer a process under which a job applicant 

who is denied employment under the legislation may appeal to 

bring to the agency’s attention any factual errors made in determining that the applicant did not make the required certification. 

S. 1045 allows each agency to decide what kind of review to make 

available for this purpose, and the Office of Personnel Management 

could, under its general authority, consider whether it would be desirable for the Director to establish any government-wide guidance 

or standards. 


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4See 159 Congressional Record H2012 (daily edition April 15, 2013). 5See 159 Congressional Record H2004–H2010 (daily edition April 15, 2013). See also, Kelley, 

Colleen, National Treasury Employees Union, Letter to Congressional Representatives, April 8, 

2013, http://www.secunion.org/files/LtrtoHouseonHR249492013.pdf. 

While S. 1045 aims to bring about greater tax compliance among 

the federal workforce, it also recognizes unforeseen circumstances 

or financial hardship can happen to even the most law abiding citizens. S. 1045 defines ‘‘seriously delinquent’’ very specifically. An 

employee does not owe ‘‘seriously delinquent’’ tax debt if he or she 

is in the process of repaying the debt in a timely manner, or if a 

hearing or appeal is pending or ongoing. In addition, if a levy has 

been issued on the tax debt or if a financial hardship exemption 

has been granted, the tax debt is not ‘‘seriously delinquent’’. 

The Committee notes that the House of Representatives considered similar legislation, H.R. 249, in April of 2013. Although a majority of members voted in favor of the legislation, the bill did not 

pass the House, because it was considered on the suspension calendar, where a two-thirds vote is required. The vote was 250 in 

favor and 159 against, which was 23 yea votes less than the necessary two-thirds.4

Opponents argued that the legislation was unwarranted, citing 

that the tax delinquency rate for federal employees is less than half 

that of the general public, mechanisms already exist to collect back 

taxes from federal employees and to discipline those who do not 

pay, and termination of individuals’ employment may make it more 

difficult to collect unpaid taxes from them.5

This Committee, however, contends legislation to further push 

higher tax compliance rates for federal employees is needed. The 

over a billion dollars in tax debt owed by federal employees is not 

an insignificant sum and demands attention. The Committee wants 

to make clear that individuals who choose not to pay their federal 

tax debt, after being given numerous options to do so, should not 

be rewarded with federal employment. Federal salaries are derived 

from federal taxes, and it is incumbent on those in federal service 

to set an example. 

Further, S. 1045 provides a number of due process provisions 

and exemptions for financial hardship, making sure to focus on the 

seriously tax delinquent federal employees who chronically refuse 

to pay what they owe. 

III. LEGISLATIVE HISTORY

On May 23, 2013, Senator Coburn introduced S. 1045, with Senator Pryor as a cosponsor. The bill was referred to the Committee 

on Homeland Security and Governmental Affairs. 

The Committee considered S. 1045 at a business meeting on May 

21, 2014. Senators Coburn and Pryor offered a substitute amendment which differentiated processes for current and prospective 

federal employees, requiring prospective employees to certify they 

do not possess seriously delinquent tax debt. For current employees, the substitute amendment includes specific timelines for agencies and employees to act, and includes specific exemptions and due 

process provisions for employees or prospective employees against 

whom adverse action is taken. The Committee adopted the substitute and then ordered the bill, as amended, favorably reported, 

both by voice vote. Senators Carper, Pryor, Landrieu, McCaskill, 


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Tester, Begich, Coburn, Johnson, Portman, and Enzi were present 

for both votes. 

IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1(a) adds a new Subchapter VIII to Chapter 73 of title 

5 and defines the terms ‘‘agency’’, ‘‘Code’’, ‘‘Federal employee, and 

‘‘seriously delinquent tax debt’’. ‘‘Seriously delinquent tax debt’’ is 

defined as any tax debt owed for which a public lien has been filed, 

with certain exceptions. Those exceptions include a debt that is 

being repaid through an arranged repayment agreement, a debt for 

which a hearing or appeal is pending or ongoing, a debt for which 

the IRS has already issued a levy for repayment, or a debt for 

which relief has been otherwise granted. 

Section 1(b)(1) prohibits any applicant for federal employment 

with seriously delinquent tax debt from working for the federal 

government or being appointed to federal employment. 

Section 1(b)(2)(A) requires an agency to provide written notice to 

a current federal employee if the employee has seriously delinquent 

tax debt. The employee has 150 days from the date of the notice 

to begin repaying the debt. 

Section 1(b)(2)(B) requires the agency to notify an employee who 

has seriously delinquent tax debt and has not begun repaying the 

debt within the 150–day deadline that they must repay the total 

amount or enter a repayment program within 60 days from when 

the notice is received, or be terminated from employment. 

Section 1(b)(2)(C) allows an exemption for federal employees who 

do not comply if the head of the employing agency determines that 

the employee’s continued service is in the best interests of the 

United States. 

Section 1(b)(2)(D) provides terminated employees with applicable 

appeal, review, and grievance procedures provided by current law, 

if they are terminated for failing to repay their seriously delinquent 

tax debt in full or for failing to enter a repayment program to begin 

paying back the seriously delinquent tax debt. 

Section 1(c) requires the head of an employing agency to require 

applicants to certify, under penalty of perjury, that they do not possess a seriously delinquent tax debt. It prohibits the employing 

agency from hiring someone who does not make such a certification. It further requires the head of an employing agency to establish a fair and efficient appeals process for employees who are 

denied employment for not making the certification. 

V. EVALUATION OF REGULATORY IMPACT

Pursuant to the requirements of paragraph 11(b) of rule XXVI of 

the Standing Rules of the Senate, the Committee has considered 

the regulatory impact that would be incurred in carrying out this 

legislation and determined that there is no regulatory impact within the meaning of the rule. The Committee further agrees with the 

Congressional Budget Office there are no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform 

Act and no costs on State, local, or tribal governments. 


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VI. CONGRESSIONAL BUDGET OFFICE ESTIMATE

JUNE 5, 2014. 

Hon. TOM CARPER, 

Chairman, Committee on Homeland Security and Governmental Affairs, U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 1045, a bill to amend title 

5, United States Code, to provide that persons having seriously delinquent tax debts shall be ineligible for federal employment. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 

S. 1045—A bill to amend title 5, United States Code, to provide that 

persons having seriously delinquent tax debts shall be ineligible 

for federal employment 

Under S. 1045, individuals with federal tax debt that is seriously 

delinquent would be ineligible to be appointed or to continue serving as an employee of the federal government. The legislation defines tax debt to be seriously delinquent if a public lien has been 

filed. Tax debt that is being repaid in a timely manner, is part of 

a requested or pending collection-due-process hearing, or whose repayment the Department of Treasury determines would cause financial hardship, would not be considered seriously delinquent. 

Federal agencies would be required to have job applicants certify 

that they do not have such debt. Current federal employees would 

have 150 days after receiving their outstanding debt notice to enter 

into agreements to resolve their debt in order to remain eligible for 

continued employment. 

Based on information from the Office of Management and Budget, the Internal Revenue Service, and staff of the Joint Committee 

on Taxation (JCT), CBO estimates that implementing S. 1045 

would cost less than $500,000 annually, subject to the availability 

of appropriated funds, mostly to create and administer certification 

forms. 

Pay-as-you-go procedures apply to the bill because it would affect 

direct spending and revenues. Agencies not funded through annual 

appropriations, such as the Tennessee Valley Authority and Bonneville Power Administration, would face some additional costs (as 

described above), but CBO estimates that any net increase in direct 

spending by such agencies would not be significant. JCT estimates 

that enacting the bill would have a negligible effect on revenues. 

S. 1045 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on budgets of state, local, or tribal governments. 

On April 11, 2013, CBO transmitted a cost estimate for H.R. 249, 

the Federal Employee Tax Accountability Act of 2013, as ordered 

reported by the House Committee on Oversight and Government 

Reform. Both bills address delinquent taxes of federal employees, 

however, the House bill would authorize agencies to review tax 

records. The estimated costs reflect the differences between the 

bills. 


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The CBO staff contact for this estimate is Matthew Pickford. The 

estimate was approved by Theresa Gullo, Deputy Assistant Director for Budget Analysis. 

VII. CHANGES IN EXISTING LAW

In compliance with section 12 of rule XXVI of the Standing Rules 

of the Senate, changes in existing law made by the bill as reported 

are shown as follows: Existing law proposed to be omitted is enclosed in øblack brackets¿, new matter is printed in italic, existing 

law in which no change is proposed is shown in roman: 

UNITED STATES CODE 

TITLE 5—GOVERNMENT ORGANIZATION 

AND EMPLOYEES 

* * * * * * * 

PART III—EMPLOYEES 

* * * * * * * 

Subpart F—Labor-Management and Employee 

Relations 

* * * * * * * 

CHAPTER 73—SUITABILITY, SECURITY, AND CONDUCT 

SUBCHAPTER I—REGULATION OF CONDUCT 

Sec. 

7301. Presidential regulations. 

* * * * * * * 

SUBCHAPTER VIII—INELIGIBILITY OF PERSONS HAVING SERIOUSLY DELINQUENT TAX DEBTS FOR 

FEDERAL EMPLOYMENT 

7381. Ineligibility of persons having seriously delinquent tax debts for Federal employment. 

* * * * * * * 

Subchapter VIII—Ineligibility of Persons Having Seriously 

Delinquent Tax Debts for Federal Employment 

§ 7381. Ineligibility of persons having seriously delinquent 

tax debts for Federal employment. 

(a) DEFINITIONS.—In this section— 

(1) the term ‘‘agency’’ means— 

(A) an Executive agency; 

(B) the United States Postal Service; 

(C) the Postal Regulatory Commission; and 

(D) an employing authority in the legislative branch; 

(2) the term ‘‘Code’’ means the Internal Revenue Code of 1986; 


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(3) the term ‘‘Federal employee’’ means an employee in or 

under an agency, including an individual described in section 

2104(b) or 2105(e); 

(4) the term ‘‘seriously delinquent tax debt’’ means an outstanding debt under the Code for which a notice of Federal tax 

lien has been filed in public records pursuant to section 6323 

of the Code, except that such term does not include— 

(A) a debt that is being paid in a timely manner pursuant to an agreement under section 6159 or section 7122 of 

the Code; 

(B) a debt with respect to which a collection due process 

hearing under section 6330 of the Code, or relief under subsection (a), (b), or (f) of section 6015 of the Code, is requested or pending; 

(C) a debt with respect to which a levy has been issued 

under section 6331 of the Code (or, in the case of an applicant for employment, a debt with respect to which the applicant agrees to be subject to a levy issued under that section if employed by an agency); and 

(D) a debt with respect to which relief under section 

6343(a)(1)(D) of the Code is granted. 

(b) INELIGIBILITY FOR FEDERAL EMPLOYMENT.— (1) IN GENERAL.—Except as provided in paragraph (2)(C), an 

individual who has a seriously delinquent tax debt shall be ineligible to continue serving as a Federal employee or, subject to 

subsection (c), to be appointed as a Federal employee. 

(2) FEDERAL EMPLOYEES.— (A) IN GENERAL.—A Federal employee who has a seriously delinquent tax debt shall have 150 days after the date 

of written notice by the agency employing the Federal employee to begin repaying the debt in a timely manner pursuant to an agreement under section 6159 or 7122 of the 

Code. 

(B) FAILURE TO BEGIN REPAYING SERIOUSLY DELINQUENT

TAX DEBT IN A TIMELY MANNER.—If a Federal employee who 

has a seriously delinquent tax debt does not begin repaying 

the debt in a timely manner pursuant to an agreement 

under section 6159 or 7122 of the Code during the period 

specified in subparagraph (A), the head of the employing 

agency of the Federal employee shall— 

(i) notify in writing the Federal employee that, not 

later than 60 days after the date on which the Federal 

employee receives the notification, the Federal employee 

shall— 

(I) repay the total amount of the seriously delinquent tax debt of the Federal employee; or 

(II) begin repaying the debt in a timely manner 

pursuant to an agreement under section 6159 or 

7122 of the Code; and 

(ii) except as provided in subparagraphs (C) and (D), 

terminate the Federal employee if the Federal employee 

does not comply with the requirements of a notice 

issued under clause (i). 

(C) EXEMPTION.—A Federal employee who does not comply with the requirements of a notice issued under subparaVerDate Sep 11 2014 06:07 Nov 18, 2014 Jkt 049010 PO 00000 Frm 00009 Fmt 6659 Sfmt 6603 E:\HR\OC\SR272.XXX SR272

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graph (B)(i) may continue serving as a Federal employee if 

the head of the employing agency of the Federal employee 

determines that the continued service of the Federal employee is in the best interests of the United States. 

(D) PROCEDURE.—Chapter 75, any other applicable provision of law, and appeal, review or grievance procedures to 

which the employee is entitled shall apply to a termination 

under subparagraph (B)(ii). 

(c) APPLICANTS.—The head of an agency— 

(1) shall take appropriate measures to ensure that each individual that submits an application for employment with the 

agency certify (as part of the application) under penalty of perjury as provided in section 1746 of title 28 that the individual 

does not have a seriously delinquent tax debt (as of the date on 

which the certification is made); 

(2) may not employ any individual who does not make the 

certification described in paragraph (1)(C); and 

(3) shall establish an appeal process for individuals denied 

employment under paragraph (2). 

Æ 


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