Senators Joni Ernst (R-IA) and Mike Braun (R-IN) this month reintroduced the Federal Employees and Retirees with Delinquent Debt Initiative (FERDI) Act.
If passed, the bill (S-1011) would disqualify individuals with delinquent tax debt from federal employment.
It also 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 federal employees with seriously delinquent tax debt from federal employment.
It defines 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.
The proposed legislation also exempts federal employees or applicants working to settle their tax debt and resolve outstanding liabilities, and provides a financial hardship exemption if the individual’s service is in the best interests of the United States.
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.
The reintroduction of the bill (last introduced in 2021) was likely in response to a new report from the Treasury Inspector General of Tax Administration entitled “The IRS Has Not Adequately Prioritized Federal Civilian Employee Nonfilers”
The report found that the number of delinquent federal civilian employees has increased by 32 percent from fiscal years 2015 to 2021.
Analysis also found that in fiscal years 2016 through 2020 over 42,000 Federal civilian employees repeatedly failed to file a tax return for multiple years.
To read the full report, go here.