[Response to Question Concerning Payment of Employment Taxes From EEOC Appropriated Funds]

The Equal Employment Opportunity Commission (EEOC) requested a decision on whether it could pay excise and payroll taxes for back pay awards from its appropriated funds. GAO noted that: (1) two railroad companies involved in an age discrimination case were required to pay a settlement fee to EEOC, back pay to former employees, and interest on the back pay; (2) EEOC withheld federal income taxes from the employees' back pay; and (3) the Internal Revenue Service informed EEOC that it was responsible for paying employers' excise and employees' withholding taxes. GAO held that: (1) EEOC should have decided the issue of whether or not to withhold taxes before final judgment; and (2) the excise and payroll taxes were not for the necessary expenses of EEOC. Accordingly, EEOC cannot pay the employees' withholding taxes and the employers' excise taxes out of its appropriations.