Coburn wants to prevent tax delinquents from getting stimulus and TARP funds

Sen. Tom Coburn (R-Okla.) is launching a bipartisan crackdown to prevent tax-delinquent Americans from receiving federal stimulus funds.

Coburn, ranking Republican on the Senate’s Permanent Subcommittee on Investigations (PSI), has requested and received permission for a Government Accountability Office investigation of whether persons and entities who owe federal tax debt received funds through the 2008 and 2009 stimulus bills.

Finance Committee Chairman Max Baucus (D-Mont.), ranking Republican Chuck Grassley (Iowa), and Sen. Carl Levin (D-Mich.), chairman of the subcommittee, also approved the study, and Coburn expects legislation to be introduced after the investigation is completed.

In a May 18 letter to Acting Comptroller General Gene Dodaro, the senators cited past GAO studies which uncovered more than 100,000 federal contractors that owed billions in tax debt. They asked for a similar probe into recipients of funds from the stimulus bill and the Troubled Asset Relief Program (TARP) bailout of banks and other financial institutions.

“In light of the fact that not everyone is paying their federal taxes and that ARRA [American Recovery and Reinvestment Act] is actively distributing taxpayer funds to tens of thousands of individuals and entities, PSI and the [Finance] Committee request that GAO… continue the work it performed in the past,” the senators wrote.

“As part of this analysis, we request that GAO develop case studies of specific persons/entities that have received ARRA funds and have not paid their federal taxes. We also request that GAO conduct the same investigation with regard to recipients of funds under the Troubled Asset Relief Program.”

Specifically, Coburn wants the IRS to provide the tax returns — not the names — of individuals or corporations that are tax-delinquent, which would then be cross-referenced with a list of stimulus fund recipients.

“The principle is that you don’t give federal contracts, especially very good contracts, to people who aren’t good citizens,” Coburn told The Hill. “And when you have tax cheats, or people who are in arrears, why should we give them federal contracts when we can give them to somebody who’s been paying their taxes?”

Once the IRS provides a list of the delinquents’ returns — expected in three or four weeks — Coburn said an amendment would be drafted to prevent any stimulus funds from reaching those contractors.

Coburn said it took Baucus seven months to approve the idea, but Baucus told The Hill he is on board with the effort.

“I think it’s a legitimate inquiry,” he said.