The News Journal Editorial Board
If you're looking for a quick $750 million to pay some of the federal government's bills, first take a look at some of the people who got a lift from the stimulus act.
That's how much about 3,500 companies owe in back taxes after getting federal stimulus money, according to a Government Accountability Office report.
Some of the companies even owed back taxes for years before they were awarded stimulus-act contracts. One social services nonprofit was awarded a $1 million contract even though it owed $2 million in payroll and other taxes.
The GAO said it doesn't know how much is owed in unpaid federal income taxes because the government doesn't know how many contractors didn't follow the proper reporting procedures required by the stimulus act.
The federal government requires a check on unpaid taxes, but much of the money was distributed by states that do not check.
The Internal Revenue Service acknowledged an engineering firm's tax debt of $6 million, even though the company received a $100,000 stimulus-act contract.
The IRS called it "an extreme case of noncompliance." Sen. Tom Carper, D-Del., called it low-hanging fruit.
"Reducing the tax gap is a common-sense approach to combating our nation's mushrooming budget deficits," the Delaware senator said at a Tuesday Senate committee meeting on "Stimulus Contractors Who Cheat on Their Taxes: What Happened?"
So go after the low-hanging fruit first, he said.
Better yet, make the contractors disclose their tax situation before they get any money.