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Federal tax compliance

Federal employees owe $6.3 billion in back taxes. The only agency allowed to see the names owes the least.

Summary

The IRS's own program counted 572,000 delinquent federal employees and retirees in FY2024 — up 43% in three years while the workforce shrank. Federal law makes the IRS fire its own willful non-filers but forbids it from telling any other agency who theirs are. The one department it may tell, Treasury, has a 2.4% delinquency rate; the Postal Service, kept blind, runs 10.1%. A 427,000-letter blast recovered $58 million of the $6.3 billion — and the staff working the caseload was cut in half.

By Augustus · July 10, 2026

The finding, in one paragraph: the federal government's own workforce is falling behind on the taxes that pay its salaries, the 's program for tracking this has watched the number grow every year it measured, the law simultaneously mandates accountability inside one department and enforces blindness everywhere else — and in the six months the numbers hit their record, the cut the staff working the caseload from 242 people to 121.

The documents

Two documents, both read directly. The first is the Treasury Inspector General for Tax Administration's May 6, 2026 report, Federal Employee and Retiree Trends Show Increased Tax Noncompliance (2026-3S0-023), a review of the 's Federal Employee/Retiree Delinquency Initiative — FERDI, the program the built in 1993 to keep the government's own payroll tax-compliant. The second is the June 25, 2026 letter from House Oversight Chairman James Comer to chief executive Frank Bisignano, which converts 's findings into a formal investigation with a document demand.

Delinquent feds & retirees, FY2024
572K
+43% since FY2021
Owed
$6.3B
over $11,000 each, on average
Staff working the caseload
121
was 242 in January 2025

The money

The balance grew every year on record
Back taxes owed by federal employees and retirees, $ billions, FY2021–FY2024
FY2021
4.8
FY2022
5.3
FY2023
6
FY2024
6.3
Source: TIGTA report 2026-3S0-023, May 2026, Figure 2
View data as table
Balance owed and delinquency rate by fiscal year
FY2021$4.8Brate 4.0% — 401,000 delinquent
FY2022$5.3Brate 4.8% — 482,000
FY2023$6.0Brate 4.9% — 499,000
FY2024$6.3Brate 5.7% — 572,000

From $4.8 billion in FY2021 to $6.3 billion in FY2024 — up $1.5 billion, or 32 percent — while the federal workforce shrank by less than one percent. Among current civilian employees alone, the delinquency rate rose from 4.9 to 6.9 percent. found roughly 50,000 civilian employees who had not filed a return for multiple years, including nearly 14,000 earning $100,000 or more — and at least 122 people who, while collecting federal salaries, had not filed for eight or more years. referred those 122 to Criminal Investigation itself, in its words, "because the 's Collection function had not."

The cross-examination

The same tax code argues with itself, and the delinquency table records the outcome. The Restructuring and Reform Act of 1998 requires the to terminate its own employees for willful failure to file. But Internal Revenue Code §6103 prohibits the from telling any other agency which of its employees are delinquent — with one exception: the Department of the Treasury. Every agency but one is legally blind to its own non-filers. The natural experiment has been running for years, and here is its result:

Accountability, measured
Tax delinquency rate by agency — the IRS may share employee names only with Treasury
Treasury (IRS may share names)
2.4%
Civilian average
6.9%
Small Business Administration
8.7%
U.S. Postal Service
10.1%
Source: Chairman Comer's June 25, 2026 letter to the IRS; civilian average from TIGTA 2026-3S0-023
View data as table
Delinquency rate by agency
Treasury (IRS may share names)2.4%the accountable case
Civilian average6.9%FY2024, TIGTA
Small Business Administration8.7%kept blind by §6103
U.S. Postal Service10.1%kept blind — 33% of all repeat non-filers

Treasury, the one department whose employer can see the names, runs 2.4 percent. The Postal Service — which accounts for a third of all repeat non-filers, nearly 15,000 people — runs 10.1 percent. The Office of Personnel Management has proposed rules allowing agencies to fast-track dismissal over unresolved tax debt; the Comer letter notes the obvious defect: with §6103 in place, agencies "would have to rely on other methods, such as self-reporting" — that is, on tax dodgers turning themselves in.

The enforcement ledger

What the did do, per both documents: in June and July 2025 it mailed 427,000 delinquency notices to noncompliant federal employees and retirees — a blast the told was one-time, not to be repeated. Within 30 days, 59,000 recipients made a payment; 4,700 paid in full; $58 million came in. Against a $6.3 billion balance, that is nine-tenths of one cent on the dollar. Meanwhile, between January and July 2025, the number of employees working the FERDI inventory fell from 242 to 121 — a 50 percent cut — even as the told its auditors it "anticipates that the delinquency rates will decrease in the coming years." A levy tool exists: the Federal Payment Levy Program can take up to 15 percent of a federal salary. The committee's first two demands are, in effect, how often have you actually used it.

What happens next

The Comer letter set a deadline of July 9, 2026 — yesterday — for the to produce FPLP referral counts, levy request numbers, and recovery totals, plus a staff briefing. 's report, for its part, made no recommendations; it is "information only," its central policy idea (amend §6103 so agencies can see their own delinquents) having been sent to Treasury's Office of Tax Policy after a 2023 audit — which, the report notes, "has not provided any feedback, guidance, or responses."

The takeaway

  • Accountability is measurable, and it works exactly once. The one agency allowed to see its employees' delinquency runs 2.4 percent; the blind ones run up to 10.1.
  • Letters are not collection. 427,000 notices recovered 0.9 percent of the balance; the tool that touches salaries exists and its usage is the committee's open question.
  • The caseload doubled-ish while the case-workers halved. 572,000 delinquents, 121 staff — one caseworker per 4,700 delinquent employees.

All figures are from the two documents cited in-line: report 2026-3S0-023 (May 6, 2026) and the House Oversight Committee's June 25, 2026 letter, both read directly. Delinquency excludes employees in installment agreements or pending offers in compromise.

Sources

Weekly digest: the most-read systems, in brief. Mondays.

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