A recent report from the Treasury Inspector General for Tax Administration (TIGTA) has exposed a troubling and worsening trend: federal civilian employees are failing to pay their taxes, and the agency responsible for enforcing the tax code appears to have little urgency in addressing this issue within its own workforce.

The findings result from the Federal Employee/Retiree Delinquency Initiative (FERDI), an IRS program that was established specifically to promote tax compliance among current and retired federal employees. And what FERDI has found is not a minor gap in compliance, but rather a systemic, growing failure that demands accountability.

In Fiscal Year 2024, more than 571,000 federal employees had outstanding tax obligations, totaling more than $6 billion—a staggering 32% increase from FY 2021, which had an outstanding obligation of $1.5 billion. In just three years, the delinquency rate has skyrocketed. Instead of addressing the issue, the IRS has swept it under the rug, failing to enforce the very standards it demands of other taxpayers.

The Alliance for IRS Accountability has consistently called out the hypocrisy of this growing trend and is highly alarmed by these findings – not only for what they reveal about the state of federal tax compliance, but for what they signal about the credibility and consistency of IRS enforcement. Voluntary tax compliance, the foundation of the American tax system, is dependent on a basic social contract: every taxpayer regardless of occupation, income, or zip code, is expected to pay what they owe. When that expectation is routinely violated by those that should set the standard, that foundation erodes. 

Federal employees are held to a higher standard because they are compensated through these public funds. Yet too many exploit the system and fail to pay their fair share. The IRS cannot credibly demand compliance from the American public while allowing noncompliance to fester within its own ranks.

AIA calls on Treasury and the IRS to take immediate action to address this enforcement failure. Anything less sends a clear and damaging message: the rules apply to some, but not all.

Read the full TIGTA report here. 

If you, or someone you know, have experienced a specific IRS abuse and wish to flag the instance for potential inclusion in our Abuse of the Week series, call our dedicated Abuse Hotline, located in the Resources section of our homepage, or contact us with the details at info@irsaccountability.org.