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S. 489: Federal Employees and Retirees with Delinquent Tax Debt Initiative (FERDI) Act


The text of the bill below is as of Feb 25, 2021 (Introduced).


II

117th CONGRESS

1st Session

S. 489

IN THE SENATE OF THE UNITED STATES

February 25, 2021

(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.

1.

Short title

This Act may be cited as the Federal Employees and Retirees with Delinquent Tax Debt Initiative (FERDI) Act.

2.

Annual report on Federal employees and retirees with delinquent tax debt

(a)

In general

The Secretary of the Treasury (or the Secretary's delegate) shall submit to the relevant committees and make a public on the internet an annual report on current and retired Federal civilian and military employees who have delinquent tax debt or an unfiled tax return for the most recent fiscal year.

(b)

Matters included

The report under subsection (a) shall include—

(1)

the population of individuals who are civilian employees, retired civilian employees, active duty military employees, military reserve or national guard employees, and retired military employees;

(2)

the number of individuals in each category listed in paragraph (1) who have delinquent tax debt (excluding those individuals who have an installment agreement) or an unfiled tax return;

(3)

the aggregate balance owed and the delinquency rate for each such category; and

(4)

the information described in paragraphs (2) and (3) broken down by Federal agency.

(c)

Relevant committees

For purposes of this section, the term relevant committees means the Committee on Finance of the Senate, the Committee on Ways and Means of the House of Representatives, the Committee on Homeland Security and Governmental Affairs of the Senate, and Committee on Oversight and Reform of the House of Representatives.

3.

Ineligibility of noncompliant taxpayers for Federal employment

(a)

In general

Chapter 73 of title 5, United States Code, is amended by adding at the end the following:

VIII

Ineligibility of Noncompliant Taxpayers for Federal Employment

7381.

Definitions

For purposes of this subchapter—

(1)

the term agency means—

(A)

an Executive agency;

(B)

the United States Postal Service;

(C)

the Postal Regulatory Commission; and

(D)

an employing authority in the legislative branch;

(2)

the term employee means an employee in or under an agency, including an individual described in section 2104(b) or 2105(e); and

(3)

the term seriously delinquent tax debt

(A)

means a Federal tax liability that has been assessed by the Secretary of the Treasury under the Internal Revenue Code of 1986 and may be collected by the Secretary by levy or by a proceeding in court; and

(B)

does not include—

(i)

a debt that is being paid in a timely manner pursuant to an agreement under section 6159 or section 7122 of such Code;

(ii)

a debt with respect to which a collection due process hearing under section 6330 of such Code, or relief under subsection (a), (b), or (f) of section 6015 of such Code, is requested or pending;

(iii)

a debt with respect to which a continuous levy has been issued under section 6331 of such Code (or, in the case of an applicant for employment, a debt with respect to which the applicant agrees to be subject to such a levy); and

(iv)

a debt with respect to which such a levy is released under section 6343(a)(1)(D) of such Code.

7382.

Ineligibility for employment

(a)

In general

Subject to subsection (c), an individual is ineligible to be appointed, or to continue serving, as an employee if that individual—

(1)

has a seriously delinquent tax debt;

(2)

does not submit the certification required under subsection (b); or

(3)

does not submit an authorization form requested under section 7383(b)(1).

(b)

Disclosure requirement

The head of each agency shall take appropriate measures to ensure that each individual applying for employment with that agency is required to submit (as part of the application for employment) a certification that the individual does not have any seriously delinquent tax debt.

(c)

Regulations

(1)

In general

Subject to paragraph (2), the Director of the Office of Personnel Management, in consultation with the Commissioner of Internal Revenue, shall, for purposes of carrying out this section with respect to the executive branch, promulgate any regulations that the Office considers necessary.

(2)

Content

The regulations promulgated under paragraph (1) shall provide for the following:

(A)

All applicable due process rights afforded by chapter 75 and any other provision of law shall apply with respect to a determination under this section that an applicant is ineligible to be appointed as an employee or that an employee is ineligible to continue serving as an employee.

(B)

Before any such determination is given effect with respect to an individual, the individual shall be afforded 180 days to demonstrate that the debt of the individual is a debt described in clause (i), (ii), (iii), or (iv) of section 7381(3)(B).

(C)

An employee may continue to serve, in a situation involving financial hardship, if the continued service of the employee is in the best interests of the United States, as determined on a case-by-case basis and certified as such by the head of the employing agency.

(d)

Reports to Congress

Not later than 1 year after the date of enactment of this section, and annually thereafter, the Director of the Office of Personnel Management shall submit to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Reform of the House of Representatives a report regarding, for the year covered by the report, the number of exemptions requested and the number of exemptions granted under subsection (c)(2)(C).

7383.

Review of public records

(a)

In general

Each agency shall provide for such reviews of public records as the head of the agency considers appropriate to determine if a notice of lien has been filed pursuant to section 6323 of the Internal Revenue Code of 1986 with respect to an employee of, or an applicant for employment with, that agency.

(b)

Additional requests

If a notice of lien is discovered under subsection (a) with respect to an employee or applicant for employment, the applicable agency may—

(1)

request that the employee or applicant execute and submit a form authorizing the Secretary of the Treasury to disclose to the head of the agency information limited to describing whether—

(A)

the employee or applicant has a seriously delinquent tax debt; or

(B)

there is a final administrative or judicial determination that such employee or applicant committed any act described in section 7385(b); and

(2)

request that the Secretary of the Treasury disclose any information so authorized to be disclosed.

(c)

Authorization form

The Secretary of the Treasury shall make available to all agencies a standard form for the authorization described in subsection (b)(1).

7384.

Confidentiality

Neither the head nor any other employee of an agency may—

(1)

use any information furnished under this subchapter for any purpose other than the administration of this subchapter;

(2)

make any publication through which the information furnished by or with respect to any particular individual under this subchapter can be identified; or

(3)

permit anyone who is not an employee of that agency to examine or otherwise have access to any such information.

7385.

Adverse actions for employees who understate taxes or fail to file

(a)

In general

(1)

In general

Subject to subsection (c), the head of an agency may take any personnel action against an employee of that agency if there is a final administrative or judicial determination that the employee committed any act described in subsection (b).

(2)

Personnel actions

In paragraph (1), the term personnel action

(A)

includes separation; and

(B)

does not include administrative leave or any other type of paid leave without duty or charge to leave.

(b)

Acts

The acts described in this subsection are—

(1)

willful failure to file any return of tax required under the Internal Revenue Code of 1986, unless such failure is due to reasonable cause and not to willful neglect; or

(2)

willful understatement of Federal tax liability, unless such understatement is due to reasonable cause and not to willful neglect.

(c)

Procedure

Under regulations prescribed by the Director of the Office of Personnel Management, an employee subject to a personnel action under this section shall be entitled to the procedures provided under section 7513 or 7543, as applicable.

.

(b)

Clerical amendment

The table of subchapters for chapter 73 of title 5, United States Code, is amended by adding at the end the following:

SUBCHAPTER VIII—INELIGIBILITY OF NONCOMPLIANT TAXPAYERS FOR FEDERAL EMPLOYMENT

7381. Definitions.

7382. Ineligibility for employment.

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 amendments made by this section, shall take effect on the date that is 270 days after the date of enactment of this Act.