I Assume There Is A "Geithner Exception"

Contractors who are also tax cheats can't win more government contacts.  From the Times:

WASHINGTON — President Obama, cracking down on tax cheats, said on Wednesday that the federal government would no longer award contracts to companies that did not pay their taxes, and called on Congress to pass legislation allowing the Internal Revenue Service to share information about businesses that owe back taxes.

Mr. Obama used his executive authority to direct the heads of federal agencies to bar “deadbeat companies” from doing business with the government. Studies by the Government Accountability Office have identified tens of thousands of such companies that, collectively, owe more than $5 billion in back taxes, the president said.

“In a time of great need, when our families and our nation are finding it necessary to tighten our belts and be more responsible with how we spend our money, we can’t afford to waste taxpayer dollars,” Mr. Obama said. “And we especially can’t afford to let companies game the system.”

I assume there is a "Geithner exception" for companies providing a seemingly vital service.  In fact, Congress ought to invite Mr. Geithner himself to explain it to us.

I hope there is some materiality limit - if a company has the low bid by $100,000 but also has a $20,000 tax dispute with the IRS, do We the People benefit by awarding the contact to the higher bidder?  Maybe, it it "sends a message" to aspiring tax cheats everywhere; maybe not, if the message is one of mindless nose-cutting and face-spiting. 

As a matter of due process, is the contractor deemed to be delinquent based solely on o IRS determination, or will the procedure allow time for appeals and a final resolution before barring the contractor?

And I don't want to know enough about taxes to answer this, but I have the notion that many small businesses do not file taxes separately but are consolidated onto the owners overall return.  If the owner has a delinquency for income items not related not related to the business, should we bar the business from winning government contracts anyway?  (If the answer is yes, then maybe we should look at resolving delinquencies by withholding Social Security checks, hmm?)

Comments

[Jack is Back!]

The irony in this legislation would make Aristophanes green with envy.

[NK]

Hey TM--

You are PROLIFIC today. Regarding Turbo Tax Timmie (TTT); aren't you interested in who the counterparties were that received 100% payoffs for swap insurance that was paid out on order from TTT's NY Fed? Obviously those counterparties were LARGE banks (I'm looking at you Goldman, Deutsche and SG), but exactly who and HOW MUCH they got is vital info to us moronic taxpayers. Would you support a claw back (in lieu of a stupid acros the board Bank Tax)of say 50-60% which was the going rate insurers were paying off in those crazy days of Oct-Nov 2008. Over to you TM.

[Janet]

I'm still scanning the bills I come across for Tim Geithner's signature...so I can write TAX CHEAT on it. Still haven't run across even one...

[cathyf]

Um, actually the IRS has no hesitation about going after your social security check.

(You need a J.K. Harris ad for the site, dude!)

[Gabriel Sutherland]

Contractor 1 stiffs Uncle Sam on taxes. Uncle Sam bars Contractor 1 from federal contracts.

Albany wins a federal contract from Uncle Sam. Albany rewards Contractor 1 with new contract.

Contractor 1 waits, hopes, but decides to hire Lobbyist 1 with the funds he should pay to the IRS to avoid paying the IRS.

This lobbying business sounds like a jobs, jobs, jobs winner. Is Uncle Sam spending more than he was last year?

[pagar]

"is the contractor deemed to be delinquent based solely on o IRS determination"

Is it possible that SOT Geithner will make the determination on a case by case basis, under the theory that it takes one to know one?

[Neo]

Didn't ACORN owe a few million in taxes ??

[pagar]

"This lobbying business sounds like a jobs, jobs, jobs winner."

Lobbying apparently doesn't pay as nearly well as
"Earmarks for Donations"
"MobilVox, Inc. tops the list of donors, contributing $8,300 to Moran and receiving a $2 million earmark."

[Annoying Old Guy]

Janet;

There is no Geithner currency. The last issue of one dollar bills was the 2006 series. The previous one was the 2003A. There's a decent chance for a 2010 issue but it's not guaranteed. Not every Secretary of the Treasury gets to sign currency.

[pagar]

IMO, Any article which includes the words "tax cheat" should include the words Rep.
Rangel, Chairman, House Ways and Means Committee.

"United States House Committee on Ways and Means - Wikipedia,----
The Committee of Ways and Means is the chief tax-writing committee of the United States House of Representatives"

[Janet]

Annoying Old Guy - Thanks for explaining. You guys here at JOM are so nice.

[Boatbuilder]

There is absolutely no danger that this will be enforced--except possibly for political punishment/reward purposes. Obama is, as usual, simply making tough-sounding noises, without any accountability. "I have directed the heads of departments ..." means: I've made a pronouncement. If it turns out that somebody tries to make me live up to it, you heads of departments will take the heat. If you try to enforce it, and it results in a political problem, you heads of departments will take the heat. That will be all. "

[JM Hanes]

"I assume there is a "Geithner exception" for companies providing a seemingly vital service.... [I]s the contractor deemed to be delinquent based solely on o IRS determination...?

Look for the union label, TM, and you'll surely find your answers.