President Obama has ordered the Office of Management and Budget, the Treasury Department and other federal agencies to begin preventing contractors who are delinquent on their taxes from receiving new government contracts.
As part of the plan, the President will order the Internal Revenue Service (IRS) to make sure that contractors are accurately reporting their taxes.
“By issuing this directive, all of us in Washington will be required to be more responsible stewards of your tax dollars. All across this country, there are people who meet their obligations each and every day. You do your jobs. You support your families. You pay the taxes you owe – because it’s a fundamental responsibility of citizenship,” said President Barack Obama.
The Administration is encouraging Congress to approve legislation to allow the IRS to crack down on corporate tax delinquents. Congress also is urged to allow data sharing between the IRS and contracting officials at agencies to ensure that scofflaws do not exploit some loophole to continue to win federal contracts.
“The steps I’m directing today and the steps I’m calling on Congress to take are just basic common-sense,” said Obama. “They’re not going to eliminate all of the waste or abuse in government contracting in one fell swoop. Going forward, we’ll also have to do more to hold contractors more accountable not just for paying taxes, but for following other laws as well.”
The move is the latest step in a wider initiative by Obama to reduce wasteful government spending, an effort that is expected to save up to $40 billion by 2011.