**PDF**In FY 2021, delinquent Federal civilian taxpayers owed nearly $1.5 billion in unpaid taxes. The
data show that from FY 2015 through FY 2021, there was an increase of 32 percent in the
number of Federal civilian employees with delinquencies, while their related balances due
increased by almost 36 percent.35 In total, over the seven years, the FERDI civilian employee
population grew by over 36,000 delinquent employees, while the balances due grew by over
$389 million.
Since 2015, numerous congressional bills have been introduced to improve Federal employees'
tax compliance.36 However, no proposal has passed both chambers of Congress and become
law. In recent testimony, the IRS Commissioner, in response to a question pertaining to Federal
contractor tax compliance, expressed support for a change to I.R.C. § 6103 allowing the IRS to
share information with Federal agencies pertaining to a Federal contractors’ tax compliance.37 A
similar approach to information sharing with respect to Federal civilian employee tax compliance
with the appropriate Federal agency may improve Federal employee tax compliance.
Repeatedly not filing a tax return when a taxpayer is required to do so is a brazen form of
noncompliance. Federal civilian employees with tax delinquencies have a legal and ethical
requirement to be current with their tax obligations. While the employees themselves know
they have an outstanding delinquency, the agencies they work for do not know who these
individuals are due to I.R.C. § 6103 statutory limitations. Additionally, the IRS is not using all
enforcement tools available for willful or grossly negligent Federal civilian nonfilers and should
give a higher priority to addressing this noncompliance by identifying these Federal employees
and working the cases for indications of fraud and willful nonfiling.
