Federal Employees and Retirees with Delinquent Tax Debt Initiative (FERDI) Act
Bill: S.489 | Sponsor: Sen. Braun, Mike (R-IN)
Policy area: Government Operations and Politics

Summary:
Federal Employees and Retirees with Delinquent Tax Debt Initiative (FERDI) Act
This bill disqualifies individuals with delinquent tax debt from federal employment and requires the Internal Revenue Service (IRS) to regularly publish a report on the tax liabilities of federal employees.
Specifically, the bill disqualifies both applicants and current employees with seriously delinquent tax debt from federal employment. The bill defines seriously delinquent tax debt as a federal tax liability that has been assessed by the Department of the Treasury and that may be collected via levy or court proceeding, with specified exceptions. Agencies must provide for appropriate review of public records to determine if there are any liens against applicants or current employees, and may take certain personnel actions against employees who willfully fail to file taxes or understate their liability.
The bill also directs the IRS to submit to specified congressional committees and make public online an annual report on current and retired federal civilian and military employees who have delinquent tax debt or an unfiled tax return for the most recent fiscal year. (The IRS currently investigates and reports on similar information through its Federal Employee/Retiree Delinquency Initiative, or FERDI).

To require an annual report of Federal employees and retirees with 
                          delinquent tax debt.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Employees and Retirees with 
Delinquent Tax Debt Initiative (FERDI) Act''.

SEC. 2. ANNUAL REPORT ON FEDERAL EMPLOYEES AND RETIREES WITH DELINQUENT 
              TAX DEBT.

    (a) In General.--The Secretary of the Treasury (or the Secretary's 
delegate) shall submit to the relevant committees and make a public on 
the internet an annual report on current and retired Federal civilian 
and military employees who have delinquent tax debt or an unfiled tax 
return for the most recent fiscal year.
    (b) Matters Included.--The report under subsection (a) shall 
include--
            (1) the population of individuals who are civilian 
        employees, retired civilian employees, active duty military 
        employees, military reserve or national guard employees, and 
        retired military employees;
            (2) the number of individuals in each category listed in 
        paragraph (1) who have delinquent tax debt (excluding those 
        individuals who have an installment agreement) or an unfiled 
        tax return;
            (3) the aggregate balance owed and the delinquency rate for 
        each such category; and
            (4) the information described in paragraphs (2) and (3) 
        broken down by Federal agency.
    (c) Relevant Committees.--For purposes of this section, the term 
``relevant committees'' means the Committee on Finance of the Senate, 
the Committee on Ways and Means of the House of Representatives, the 
Committee on Homeland Security and Governmental Affairs of the Senate, 
and Committee on Oversight and Reform of the House of Representatives.

SEC. 3. INELIGIBILITY OF NONCOMPLIANT TAXPAYERS FOR FEDERAL EMPLOYMENT.

    (a) In General.--Chapter 73 of title 5, United States Code, is 
amended by adding at the end the following:

``SUBCHAPTER VIII--INELIGIBILITY OF NONCOMPLIANT TAXPAYERS FOR FEDERAL 
                               EMPLOYMENT

``Sec. 7381. Definitions
    ``For purposes of this subchapter--
            ``(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 `employee' means an employee in or under an 
        agency, including an individual described in section 2104(b) or 
        2105(e); and
            ``(3) the term `seriously delinquent tax debt'--
                    ``(A) means a Federal tax liability that has been 
                assessed by the Secretary of the Treasury under the 
                Internal Revenue Code of 1986 and may be collected by 
                the Secretary by levy or by a proceeding in court; and
                    ``(B) does not include--
                            ``(i) a debt that is being paid in a timely 
                        manner pursuant to an agreement under section 
                        6159 or section 7122 of such Code;
                            ``(ii) a debt with respect to which a 
                        collection due process hearing under section 
                        6330 of such Code, or relief under subsection 
                        (a), (b), or (f) of section 6015 of such Code, 
                        is requested or pending;
                            ``(iii) a debt with respect to which a 
                        continuous levy has been issued under section 
                        6331 of such Code (or, in the case of an 
                        applicant for employment, a debt with respect 
                        to which the applicant agrees to be subject to 
                        such a levy); and
                            ``(iv) a debt with respect to which such a 
                        levy is released under section 6343(a)(1)(D) of 
                        such Code.
``Sec. 7382. Ineligibility for employment
    ``(a) In General.--Subject to subsection (c), an individual is 
ineligible to be appointed, or to continue serving, as an employee if 
that individual--
            ``(1) has a seriously delinquent tax debt;
            ``(2) does not submit the certification required under 
        subsection (b); or
            ``(3) does not submit an authorization form requested under 
        section 7383(b)(1).
    ``(b) Disclosure Requirement.--The head of each agency shall take 
appropriate measures to ensure that each individual applying for 
employment with that agency is required to submit (as part of the 
application for employment) a certification that the individual does 
not have any seriously delinquent tax debt.
    ``(c) Regulations.--
            ``(1) In general.--Subject to paragraph (2), the Director 
        of the Office of Personnel Management, in consultation with the 
        Commissioner of Internal Revenue, shall, for purposes of 
        carrying out this section with respect to the executive branch, 
        promulgate any regulations that the Office considers necessary.
            ``(2) Content.--The regulations promulgated under paragraph 
        (1) shall provide for the following:
                    ``(A) All applicable due process rights afforded by 
                chapter 75 and any other provision of law shall apply 
                with respect to a determination under this section that 
                an applicant is ineligible to be appointed as an 
                employee or that an employee is ineligible to continue 
                serving as an employee.
                    ``(B) Before any such determination is given effect 
                with respect to an individual, the individual shall be 
                afforded 180 days to demonstrate that the debt of the 
                individual is a debt described in clause (i), (ii), 
                (iii), or (iv) of section 7381(3)(B).
                    ``(C) An employee may continue to serve, in a 
                situation involving financial hardship, if the 
                continued service of the employee is in the best 
                interests of the United States, as determined on a 
                case-by-case basis and certified as such by the head of 
                the employing agency.
    ``(d) Reports to Congress.--Not later than 1 year after the date of 
enactment of this section, and annually thereafter, the Director of the 
Office of Personnel Management shall submit to the Committee on 
Homeland Security and Governmental Affairs of the Senate and the 
Committee on Oversight and Reform of the House of Representatives a 
report regarding, for the year covered by the report, the number of 
exemptions requested and the number of exemptions granted under 
subsection (c)(2)(C).
``Sec. 7383. Review of public records
    ``(a) In General.--Each agency shall provide for such reviews of 
public records as the head of the agency considers appropriate to 
determine if a notice of lien has been filed pursuant to section 6323 
of the Internal Revenue Code of 1986 with respect to an employee of, or 
an applicant for employment with, that agency.
    ``(b) Additional Requests.--If a notice of lien is discovered under 
subsection (a) with respect to an employee or applicant for employment, 
the applicable agency may--
            ``(1) request that the employee or applicant execute and 
        submit a form authorizing the Secretary of the Treasury to 
        disclose to the head of the agency information limited to 
        describing whether--
                    ``(A) the employee or applicant has a seriously 
                delinquent tax debt; or
                    ``(B) there is a final administrative or judicial 
                determination that such employee or applicant committed 
                any act described in section 7385(b); and
            ``(2) request that the Secretary of the Treasury disclose 
        any information so authorized to be disclosed.
    ``(c) Authorization Form.--The Secretary of the Treasury shall make 
available to all agencies a standard form for the authorization 
described in subsection (b)(1).
``Sec. 7384. Confidentiality
    ``Neither the head nor any other employee of an agency may--
            ``(1) use any information furnished under this subchapter 
        for any purpose other than the administration of this 
        subchapter;
            ``(2) make any publication through which the information 
        furnished by or with respect to any particular individual under 
        this subchapter can be identified; or
            ``(3) permit anyone who is not an employee of that agency 
        to examine or otherwise have access to any such information.
``Sec. 7385. Adverse actions for employees who understate taxes or fail 
              to file
    ``(a) In General.--
            ``(1) In general.--Subject to subsection (c), the head of 
        an agency may take any personnel action against an employee of 
        that agency if there is a final administrative or judicial 
        determination that the employee committed any act described in 
        subsection (b).
            ``(2) Personnel actions.--In paragraph (1), the term 
        `personnel action'--
                    ``(A) includes separation; and
                    ``(B) does not include administrative leave or any 
                other type of paid leave without duty or charge to 
                leave.
    ``(b) Acts.--The acts described in this subsection are--
            ``(1) willful failure to file any return of tax required 
        under the Internal Revenue Code of 1986, unless such failure is 
        due to reasonable cause and not to willful neglect; or
            ``(2) willful understatement of Federal tax liability, 
        unless such understatement is due to reasonable cause and not 
        to willful neglect.
    ``(c) Procedure.--Under regulations prescribed by the Director of 
the Office of Personnel Management, an employee subject to a personnel 
action under this section shall be entitled to the procedures provided 
under section 7513 or 7543, as applicable.''.
    (b) Clerical Amendment.--The table of subchapters for chapter 73 of 
title 5, United States Code, is amended by adding at the end the 
following:

``SUBCHAPTER VIII--INELIGIBILITY OF NONCOMPLIANT TAXPAYERS FOR FEDERAL 
                               EMPLOYMENT

``7381. Definitions.
``7382. Ineligibility for employment.
``7383. Review of public records.
``7384. Confidentiality.
``7385. Adverse actions for employees who understate taxes or fail to 
                            file.''.
    (c) Effective Date.--This section, and the amendments made by this 
section, shall take effect on the date that is 270 days after the date 
of enactment of this Act.
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