29 July 2014


From the 34 page US General Accountability Office (GAO) Tax Debts Owed by DOD Employees and Contractors report (GAO-14-686R) -
GAO found that about 83,000 Department of Defense (DOD) employees and contractors who held or were determined eligible for secret, top secret, or sensitive compartmented information (SCI) clearances, or related interim clearances, had unpaid federal tax debt totaling more than $730 million as of June 30, 2012. DOD reported to GAO that about 3.2 million civilian and military employees and contractorsheld or were approved for similar clearances from January 1, 2006, to December 31, 2011, which was the time frame for GAO’s analysis. According to data from the Internal Revenue Service (IRS), about 34,000 of these 83,000 individuals (about 40 percent) with tax debt had a repayment plan with the IRS to pay back their debt as of June 30, 2012. GAO’s analysis cannot be generalized to individuals that were granted eligibility for security clearances and were non-DOD employees of the executive branch, employees of the legislative branch, or employees of the intelligence community. 
As part of this work, GAO also identified individuals with unpaid tax debts who also had access to classified information. DOD officials stated that individualshaving access to classified information pose a greater risk because they have more opportunity toactually compromise classified information than a person who is only eligible to access classified information. GAO found that about 26,000 of the 83,000 DOD employees and contractors with eligibilities who owed taxes (about 31 percent) had access to classified information, and they owed about $229 million in federal taxes as of June 2012. 
In September 2013, GAO reported that additional mechanisms could improve federal agencies’ ability to detect delinquent federal tax debts owed by individuals determined eligible for security clearance, but statutory privacy protections limit access to this information (GAO-13-733). During that prior work, officials from the Office of the Director of National Intelligence (ODNI) told GAO that they had formed a working group in 2012, in collaboration with the Office of Personnel Management (OPM) and other federal agencies to, among other things, explore whether an automated process for reviewing federal tax compliance could be established. GAO recommended that ODNI, in consultation with OPM and the Department of the Treasury, evaluate the feasibility of federal agencies routinely obtaining federal debt information from the Treasury Offset Program (TOP) system, or a similar automated mechanism. TOP is a centralized offset program, administered by the Department of the Treasury, to collect delinquent debts owed to federal agencies and states. Both ODNI and OPM concurred with GAO’s September 2013 recommendation.