Government watchdog: IRS does business with 17 tax delinquent contractors despite ban

Markets Associated Press

A government watchdog says the IRS is doing business with tax delinquent contractors despite a 2012 law that bars the tax agency from awarding contracts to these businesses.

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In a report released Wednesday, the agency's inspector general says the IRS awarded contracts to 17 businesses in 2012 and 2013 that had delinquent tax debts.

The tax debts totaled more than $10 million as of Sept. 30, 2013. The businesses were awarded 57 contracts worth nearly $19 million.

The IRS said in a statement that the contracts represented only a small fraction of the more than 20,000 contracts the agency awarded in 2012 and 2013. The statement said nine of the contractors have since paid their back taxes or enrolled in a payment plan.

The report did not name the contractors.