What This Bill Does
This bill requires the Secretary of the Treasury to publish an annual report about federal employees and retirees who owe unpaid taxes or have not filed tax returns. The bill also creates rules that make people with serious unpaid tax debt ineligible to work for the federal government.
Who It Affects
- Current federal civilian employees
- Retired federal civilian employees
- Active duty military employees
- Military reserve and National Guard employees
- Retired military employees
- People applying for federal jobs
- Federal agencies that hire employees
- Congressional committees that oversee federal finances and government operations
Key Provisions
- The Secretary of the Treasury must submit an annual report to Congress and publish it online listing federal employees and retirees with unpaid taxes, broken down by type of employee (civilian, military, retired) and by federal agency (Sec. 2)
- The report must include the total amount owed in unpaid taxes and the delinquency rate (the percentage of people who owe) for each employee category and agency (Sec. 2)
- People with seriously delinquent tax debt (unpaid taxes that the government can collect through legal action) cannot be hired as federal employees or continue working as federal employees (Sec. 3)
- Job applicants must sign a form stating they do not have seriously delinquent tax debt (Sec. 3)
- Federal agencies have 180 days to let an employee prove their debt is not "seriously delinquent" before taking action to fire them (Sec. 3)
- An agency head may fire an employee if there is a final court or administrative decision that the employee willfully failed to file required tax returns or willfully understated their federal taxes (Sec. 3)
What Changes
The Secretary of the Treasury will begin publishing detailed annual reports about federal employees and retirees with unpaid taxes. Federal agencies must check job applicants' tax compliance status before hiring. Agencies can deny employment or fire current employees who have serious unpaid tax debt, unless the person qualifies for an exception based on financial hardship. Agencies must follow specific legal procedures before firing someone for tax violations.
Important Definitions
- Seriously delinquent tax debt: A federal tax debt that has been formally determined by the Treasury Secretary and can be collected through court action or wage garnishment (taking money from paychecks). This does not include debts being paid through an agreement, debts under legal challenge, or debts subject to a continuous wage levy (a court order to take money from paychecks).
- Willful understatement: Deliberately reporting less income or taxes owed than the law requires, unless the person had a good reason and did not act with willful neglect (careless disregard).
- Personnel action: Any employment decision including termination (firing), but not paid administrative leave or other paid time off.
Effective Date
270 days after the bill becomes law (Sec. 3).
II
118TH CONGRESS
1ST SESSION
S. 1011
To require an annual report of Federal employees and retirees with delinquent
tax debt.
IN THE SENATE OF THE UNITED STATES
MARCH 28, 2023
Mr. BRAUN (for himself and Ms. ERNST) introduced the following bill; which
was read twice and referred to the Committee on Homeland Security and
Governmental Affairs
A BILL
To require an annual report of Federal employees and
retirees with delinquent tax debt.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Federal Employees and
4
Retirees with Delinquent Tax Debt Initiative (FERDI)
5
Act’’.
6
SEC. 2. ANNUAL REPORT ON FEDERAL EMPLOYEES AND
7
RETIREES WITH DELINQUENT TAX DEBT.
8
(a) IN GENERAL.—The Secretary of the Treasury (or
9
the Secretary’s delegate) shall submit to the relevant com-
10
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•S 1011 IS
mittees and make a public on the internet an annual re-
1
port on current and retired Federal civilian and military
2
employees who have delinquent tax debt or an unfiled tax
3
return for the most recent fiscal year.
4
(b) MATTERS INCLUDED.—The report under sub-
5
section (a) shall include—
6
(1) the population of individuals who are civil-
7
ian employees, retired civilian employees, active duty
8
military employees, military reserve or national
9
guard employees, and retired military employees;
10
(2) the number of individuals in each category
11
listed in paragraph (1) who have delinquent tax debt
12
(excluding those individuals who have an installment
13
agreement) or an unfiled tax return;
14
(3) the aggregate balance owed and the delin-
15
quency rate for each such category; and
16
(4) the information described in paragraphs (2)
17
and (3) broken down by Federal agency.
18
(c) RELEVANT COMMITTEES.—For purposes of this
19
section, the term ‘‘relevant committees’’ means the Com-
20
mittee on Finance of the Senate, the Committee on Ways
21
and Means of the House of Representatives, the Com-
22
mittee on Homeland Security and Governmental Affairs
23
of the Senate, and the Committee on Oversight and Ac-
24
countability of the House of Representatives.
25
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•S 1011 IS
SEC. 3. INELIGIBILITY OF NONCOMPLIANT TAXPAYERS FOR
1
FEDERAL EMPLOYMENT.
2
(a) IN GENERAL.—Chapter 73 of title 5, United
3
States Code, is amended by adding at the end the fol-
4
lowing:
5
‘‘SUBCHAPTER VIII—INELIGIBILITY OF NON-
6
COMPLIANT TAXPAYERS FOR FEDERAL EM-
7
PLOYMENT
8
‘‘§ 7381. Definitions
9
‘‘For purposes of this subchapter—
10
‘‘(1) the term ‘agency’ means—
11
‘‘(A) an Executive agency;
12
‘‘(B) the United States Postal Service;
13
‘‘(C) the Postal Regulatory Commission;
14
and
15
‘‘(D) an employing authority in the legisla-
16
tive branch;
17
‘‘(2) the term ‘employee’ means an employee in
18
or under an agency, including an individual de-
19
scribed in section 2104(b) or 2105(e); and
20
‘‘(3) the term ‘seriously delinquent tax debt’—
21
‘‘(A) means a Federal tax liability that has
22
been assessed by the Secretary of the Treasury
23
under the Internal Revenue Code of 1986 and
24
may be collected by the Secretary by levy or by
25
a proceeding in court; and
26
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‘‘(B) does not include—
1
‘‘(i) a debt that is being paid in a
2
timely manner pursuant to an agreement
3
under section 6159 or section 7122 of such
4
Code;
5
‘‘(ii) a debt with respect to which a
6
collection due process hearing under sec-
7
tion 6330 of such Code, or relief under
8
subsection (a), (b), or (f) of section 6015
9
of such Code, is requested or pending;
10
‘‘(iii) a debt with respect to which a
11
continuous levy has been issued under sec-
12
tion 6331 of such Code (or, in the case of
13
an applicant for employment, a debt with
14
respect to which the applicant agrees to be
15
subject to such a levy); and
16
‘‘(iv) a debt with respect to which
17
such a levy is released under section
18
6343(a)(1)(D) of such Code.
19
‘‘§ 7382. Ineligibility for employment
20
‘‘(a) IN GENERAL.—Subject to subsection (c), an in-
21
dividual is ineligible to be appointed, or to continue serv-
22
ing, as an employee if that individual—
23
‘‘(1) has a seriously delinquent tax debt;
24
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•S 1011 IS
‘‘(2) does not submit the certification required
1
under subsection (b); or
2
‘‘(3) does not submit an authorization form re-
3
quested under section 7383(b)(1).
4
‘‘(b) DISCLOSURE REQUIREMENT.—The head of each
5
agency shall take appropriate measures to ensure that
6
each individual applying for employment with that agency
7
is required to submit (as part of the application for em-
8
ployment) a certification that the individual does not have
9
any seriously delinquent tax debt.
10
‘‘(c) REGULATIONS.—
11
‘‘(1) IN GENERAL.—Subject to paragraph (2),
12
the Director of the Office of Personnel Management,
13
in consultation with the Commissioner of Internal
14
Revenue, shall, for purposes of carrying out this sec-
15
tion with respect to the executive branch, promul-
16
gate any regulations that the Office considers nec-
17
essary.
18
‘‘(2) CONTENT.—The regulations promulgated
19
under paragraph (1) shall provide for the following:
20
‘‘(A) All applicable due process rights af-
21
forded by chapter 75 and any other provision of
22
law shall apply with respect to a determination
23
under this section that an applicant is ineligible
24
to be appointed as an employee or that an em-
25
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•S 1011 IS
ployee is ineligible to continue serving as an
1
employee.
2
‘‘(B) Before any such determination is
3
given effect with respect to an individual, the
4
individual shall be afforded 180 days to dem-
5
onstrate that the debt of the individual is a
6
debt described in clause (i), (ii), (iii), or (iv) of
7
section 7381(3)(B).
8
‘‘(C) An employee may continue to serve,
9
in a situation involving financial hardship, if
10
the continued service of the employee is in the
11
best interests of the United States, as deter-
12
mined on a case-by-case basis and certified as
13
such by the head of the employing agency.
14
‘‘(d) REPORTS TO CONGRESS.—Not later than 1 year
15
after the date of enactment of this section, and annually
16
thereafter, the Director of the Office of Personnel Man-
17
agement shall submit to the Committee on Homeland Se-
18
curity and Governmental Affairs of the Senate and the
19
Committee on Oversight and Accountability of the House
20
of Representatives a report regarding, for the year covered
21
by the report, the number of exemptions requested and
22
the number of exemptions granted under subsection
23
(c)(2)(C).
24
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‘‘§ 7383. Review of public records
1
‘‘(a) IN GENERAL.—Each agency shall provide for
2
such reviews of public records as the head of the agency
3
considers appropriate to determine if a notice of lien has
4
been filed pursuant to section 6323 of the Internal Rev-
5
enue Code of 1986 with respect to an employee of, or an
6
applicant for employment with, that agency.
7
‘‘(b) ADDITIONAL REQUESTS.—If a notice of lien is
8
discovered under subsection (a) with respect to an em-
9
ployee or applicant for employment, the applicable agency
10
may—
11
‘‘(1) request that the employee or applicant exe-
12
cute and submit a form authorizing the Secretary of
13
the Treasury to disclose to the head of the agency
14
information limited to describing whether—
15
‘‘(A) the employee or applicant has a seri-
16
ously delinquent tax debt; or
17
‘‘(B) there is a final administrative or judi-
18
cial determination that such employee or appli-
19
cant committed any act described in section
20
7385(b); and
21
‘‘(2) request that the Secretary of the Treasury
22
disclose any information so authorized to be dis-
23
closed.
24
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‘‘(c) AUTHORIZATION FORM.—The Secretary of the
1
Treasury shall make available to all agencies a standard
2
form for the authorization described in subsection (b)(1).
3
‘‘§ 7384. Confidentiality
4
‘‘Neither the head nor any other employee of an agen-
5
cy may—
6
‘‘(1) use any information furnished under this
7
subchapter for any purpose other than the adminis-
8
tration of this subchapter;
9
‘‘(2) make any publication through which the
10
information furnished by or with respect to any par-
11
ticular individual under this subchapter can be iden-
12
tified; or
13
‘‘(3) permit anyone who is not an employee of
14
that agency to examine or otherwise have access to
15
any such information.
16
‘‘§ 7385. Adverse actions for employees who under-
17
state taxes or fail to file
18
‘‘(a) IN GENERAL.—
19
‘‘(1) IN GENERAL.—Subject to subsection (c),
20
the head of an agency may take any personnel ac-
21
tion against an employee of that agency if there is
22
a final administrative or judicial determination that
23
the employee committed any act described in sub-
24
section (b).
25
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•S 1011 IS
‘‘(2) PERSONNEL ACTIONS.—In paragraph (1),
1
the term ‘personnel action’—
2
‘‘(A) includes separation; and
3
‘‘(B) does not include administrative leave
4
or any other type of paid leave without duty or
5
charge to leave.
6
‘‘(b) ACTS.—The acts described in this subsection
7
are—
8
‘‘(1) willful failure to file any return of tax re-
9
quired under the Internal Revenue Code of 1986,
10
unless such failure is due to reasonable cause and
11
not to willful neglect; or
12
‘‘(2) willful understatement of Federal tax li-
13
ability, unless such understatement is due to reason-
14
able cause and not to willful neglect.
15
‘‘(c) PROCEDURE.—Under regulations prescribed by
16
the Director of the Office of Personnel Management, an
17
employee subject to a personnel action under this section
18
shall be entitled to the procedures provided under section
19
7513 or 7543, as applicable.’’.
20
(b) CLERICAL AMENDMENT.—The table of sub-
21
chapters for chapter 73 of title 5, United States Code,
22
is amended by adding at the end the following:
23
‘‘SUBCHAPTER VIII—INELIGIBILITY OF NONCOMPLIANT
TAXPAYERS FOR FEDERAL EMPLOYMENT
‘‘7381. Definitions.
‘‘7382. Ineligibility for employment.
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•S 1011 IS
‘‘7383. Review of public records.
‘‘7384. Confidentiality.
‘‘7385. Adverse actions for employees who understate taxes or fail to file.’’.
(c) EFFECTIVE DATE.—This section, and the amend-
1
ments made by this section, shall take effect on the date
2
that is 270 days after the date of enactment of this Act.
3
Æ
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