Paid in Taxes? Pay Your Taxes!

If you’re a federal contractor looking for lucrative government work, you’d better have all your taxes in order if you want to even be considered. Under a recently signed executive order by the Obama administration, the federal government will no longer award contracts to companies with outstanding tax obligations, with the president saying that it’s wrong for companies to take taxpayer dollars without being taxpayers themselves.

The order instructs the Treasury Department and the Office of Management and Budget to prevent delinquent companies from getting contracts with any federal agency. The IRS has also been instructed to review the tax returns of whatever contractors do gets jobs so as to ensure truthful reporting.

The executive order came in response to a 2007 GAO study that found that some the U.S. is owed some $5 billion in unpaid taxes from companies that are currently being awarded government contracts. And it’s not due to any sort of hardship either – the same study found that the company owners count yachts, jewelry and multi-million dollar homes among their many, many assets. According to the president, one company owner who owed over $1 million in taxes was paid over $1 million as a defense contractor, and instead of using that money to pay his back taxes, chose to buy a boat, some cars, and a home abroad with his earnings.