One construction firm owed $400,000 in back taxes, but received a contract worth more than $1 million.
Sen. Tom Coburn, R-Okla., walks to an elevator on Capitol Hill in Washington. He said Congress needs a "wake-up call" over the awarding of stimulus money to tax cheats. By KENT HOOVER
Boston Business Journal
A new study found that 3,700 businesses and nonprofit organizations that owed back taxes to the federal government received more than $24 billion in economic stimulus funds.
The number of tax-delinquent stimulus bill beneficiaries could be higher: The Government Accountability Office examined only 63,000 of the 80,000 recipients of stimulus contracts and grants. The 3,700 organizations it identified owed $757 million in back taxes.
Fifteen cases involve “abusive or potentially criminal activity,” said the GAO, which referred these cases to the Internal Revenue Service.
One construction firm owed $400,000 in back taxes, but received a contract worth more than $1 million. A nonprofit organization that owned more than $2 million in unpaid payroll taxes got more than $1 million in stimulus funds.
The federal government has established a program to catch tax-delinquent organizations that receive federal contracts, but many of the stimulus-funded contracts and grants were awarded by states and localities or by prime contractors.
The fact that “such a huge amount of the stimulus money went to known tax cheats should be a wake-up call for Congress,” said Sen. Tom Coburn, R-Okla.