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- Addressed

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- Partially Addressed

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- Not Addressed

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- Consolidated or Other

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- Pending

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- Closed-Partially Addressed

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- Closed-Not Addressed

Year Identified: 2014

Area Number: 15

Area Type: Cost Savings & Revenue Enhancement

Action:

Congress may wish to consider enabling and requiring the Secretary of State to screen and prevent individuals who owe federal taxes from receiving passports, to include establishing criteria for specific categories of passport holders and waivers as appropriate. To do this, Congress may wish to ask the Secretary of State and Commissioner of Internal Revenue to jointly study policy and practical issues and develop options for further consideration, including developing appropriate criteria and safeguards.

Progress:

In December 2015, the “FAST” Act, a comprehensive transportation bill, was enacted as law. In response to GAO’s March 2011 suggestion, the FAST Act, among other things, (1) enables the Internal Revenue Service to provide information to the Department of State (State) about individuals with “seriously delinquent tax debt,” which the act defines as certain types of delinquent debt in an amount greater than $50,000, and (2) requires State to restrict the issuance of passports to individuals with such debt in most cases. By linking federal tax debt collection to passport issuance, Congress has enabled State and the Internal Revenue Service to increase taxpayer compliance with tax laws and to help reduce the federal deficit.

Action:

The Commissioner of the Internal Revenue Service (IRS) should explore further opportunities to enhance the collection of unpaid federal taxes from Medicaid providers. This includes conducting a cost-benefit analysis of the implementation of a continuous levy program and expanded use of levies against providers with large Medicaid payments and significant unpaid federal taxes. Where appropriate, IRS should seek legislation to modify existing law to allow for more efficient collection of outstanding tax debts from Medicaid providers. 

Progress:

In February 2013, the IRS Director for Collection Policy issued guidance to address the one-time notice of levy to state Medicaid agencies. This guidance will help to better position IRS field operation personnel to determine the appropriate levy collection method for Medicaid payments. By taking these steps, IRS has explored further opportunities to enhance the collection of unpaid federal taxes from Medicaid providers, as GAO recommended in July 2012. 

Action:

The Director of National Intelligence, in consultation with the Office of Personnel Management (OPM) and the Department of the Treasury (Treasury), should evaluate the feasibility of federal agencies routinely obtaining federal debt information from the Department of the Treasury, or a similar automated mechanism that includes federal taxes, for the purposes of investigating and adjudicating clearance applicants, as well as for ongoing monitoring of current clearance holders’ tax-debt status.  If this is found to be impractical, the Office of the Director of National Intelligence (ODNI) should consider whether an exception to federal privacy law is advisable and, if so, develop a legislative proposal, in consultation with Congress, to authorize access to tax-debt information.

Progress:

 As of August 2017, an interagency working group consisting of ODNI, OPM, and the Internal Revenue Service (IRS) had taken steps to evaluate the feasibility of federal agencies routinely obtaining federal debt information from an automated mechanism, as GAO recommended in September 2013. Specifically, ODNI reported that IRS developed a proposed approach for performing such a tax compliance check and suggested that IRS would be able to support funding for the project. According to ODNI, the target completion date for this proposed solution is the start of fiscal year 2018. When implemented, these efforts could help to detect the tax debts of federal employees and contractors who hold or apply for a national security clearance.