Tuesday, November 21, 2017

Treasury Department To Pull Your Tax Returns Prior to Awarding a Contract

The Treasury Department has issued an interim rule to its Acquisition Regulations (DTARs) to permit contracting officials to obtain taxpayer tax return information as part of their responsibility determination - to determine whether prospective contractors are in compliance with tax laws or have unpaid liabilities. While this pertains only Treasury Department right now, these requirements could spread to other Executive Agencies. In fact, there are probably a bunch of regulators asking themselves right now, "why didn't we think of that?"

The Treasury Department determined that IRS information is needed for determining an offeror's eligibility to receive an award, including, but not limited to implementation of the statutory prohibition of making an award to corporations that have unpaid Federal tax liabilities.

This new regulation will be implemented through the Representations and Certifications section regarding responsibility matters identified by the term "Tax Check". Essentially, offerors will be authorizing the Treasury Department to pull income tax information.

Contractors (and prospective contractors) might find it beneficial to take steps to confirm that it does not have a delinquent Federal tax liability prior to submission of a proposal and/or obtain information to positively demonstrate to the contracting officer that it has no such liability. Its probably only a matter of time before faulty information is transferred from the IRS to a contracting officer somewhere and that information could jeopardize an offeror's chances for securing a contract.

Read more about the new interim rule here.


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