A new report by the Inspector General says that the Internal Revenue Service is currently doing business with 1168 vendors who owe back taxes.
The report was released Tuesday. The data is effective July of this year. The total taxes due from these vendors…..$589,000,000.

In response to the report the IRS said they check whether vendors owe back taxes when they award contracts. They do not continue to monitor whether the vendors stay current. The report also says that most of the taxes have been delinquent for less than a year.

These delinquent vendors represent about 7% of all the vendors the IRS uses. In many cases the IRS has no choice. The service must routinely pay fees to financial institutions and other governmental entities. If those entities have unpaid taxes the Service must still use them.

The report also said that federal law permits the service to withhold payment to individuals and businesses that owe back taxes.

The report said that the Service Awarded contracts to three vendors that had been excluded from doing business with the federal government. However, the report went on to say IRS efforts to prevent such contracts were “generally effective”.