IRS data reveals that 6% of federal workers are delinquent on their taxes

Tens of thousands of federal workers have been delinquent on their taxes, including more than 5% of congressional employees and 4% of White House staff, according to new IRS data released this week.

They were nowhere near the worst.

The Smithsonian Institution saw nearly 10% of its workforce delinquent in 2023, as did nearly 9% of postal workers. The District of Columbia’s Court Services division led the way with a nearly 12% delinquency rate.

The data was released by Sen. Charles E. Grassley, Congress’ senior Republican, who said it was a black eye for the government.

“Taxpayers deserve to be assured that federal employees, whose salaries and benefits are funded through taxpayer dollars, are held to account by the IRS for failing to pay their tax obligations, just like the rest of Americans are held to account,” he said.

The data came from former IRS Commissioner Danny Werfel, in a letter last year to Mr. Grassley. He provided delinquency data for several fiscal years up through 2023, and they showed things are getting worse.

The IRS flagged about 127,000 federal civilian workers as delinquent — either not filing or not having fully paid up — in 2019. By 2023, that figure had topped 190,000, and they owed nearly $2 billion.

Those 190,000 employees make up 6.2% of the total civilian workforce.

Active-duty military had a much lower delinquency rate, at less than 2%.

On Capitol Hill, some 649 House employees were delinquent in 2023, or 6.7% of the workforce. The Senate’s rate was lower, at 4.2%.

The Treasury Department did the best of all, with a delinquency rate of less than 1.4%, or 1,319 of its 95,236 employees in arrears.

Among the other major Cabinet departments, Housing and Urban Development was the worst at slightly more than 6% in arrears. The Justice Department was a relatively low 3% and Homeland Security was slightly below 4%.

Being delinquent doesn’t automatically mean someone is a tax cheat, Mr. Werfel said in a letter last year providing his data to Mr. Grassley, Iowa Republican.

He said out of a universe of 42,0147 cases flagged by the agency’s inspector general in a previous report 3,712 of them had at least two unfiled returns as of March 2023.

Even then, he said, opening a fraud investigation requires evidence of “willfulness.” He said 163 cases showed enough flags to be sent to criminal investigators.

“Our civil functions will refer those cases with sufficient willfulness indicators to CI for their consideration,” Mr. Werfel said.

Beyond that, he said, the IRS was boosting its Federal Employee/Retiree Delinquency Initiative by prioritizing “balance due” and “delinquent return” cases for collections.

But he said the IRS does not agree with the inspector general’s suggestion to have a separate referral process to the Justice Department for federal employees cases that rise to the level of criminality.

He said willful failure to file is only a misdemeanor and his criminal investigators and federal prosecutors are unlikely to devote much effort to the cases.

“Both agencies invest resources in prosecuting felonies that are likely to result in a substantial period of incarceration and provide the most effective deterrence,” he said.