New Rule Targets Tax-Delinquent Contractors The Federal Acquisition Regulation councils have adopted a final rule that could bar tax delinquents from receiving government contracts. While the rule provides that a company could be suspended or debarred because of overdue taxes, the House has gone further, passing legislation that would require debarment of such companies. The rule, published in the April 22 Federal Register, says companies must disclose whether they have been convicted over the past three years of violating any federal criminal tax law or failing to pay any tax, and whether they have been notified of an unresolved tax lien or unsatisfied federal tax delinquency of more than $3,000. A contracting officer could request additional information to determine whether the contractor qualified as responsible. “A contractor’s present responsibility to perform includes financial responsibility, as well as integrity,” the councils said. “The rule is not intended as a tool to collect taxes for the IRS, but to provide information to the contracting officer on issues that may affect the contractor’s responsibility.” The House-passed Contracting and Tax Accountability Act, H.R. 4881, would require bidders on federal contracts to certify that they have no “seriously delinquent Federal tax debts” – that is, a tax debt on which a notice of lien has been filed. A company having such debt would be debarred. (SAA, 4/18) Sen. Barack Obama, D-IL, is sponsoring the Senate version of the bill. Both the rule and the legislation are the result of Government Accountability Office findings that thousands of contractors owe millions of dollars in overdue taxes. The final rule is effective May 22.