2nd lawmaker pledges change after federal contract scandal exposed

2nd lawmaker pledges change after federal contract scandal exposed
Updated: Nov. 10, 2017 at 4:39 PM EST
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(WWBT) - Another congressman is pledging a bill to fix a problem NBC12 pointed out, about how the federal government is handing out your tax money to companies who owe taxes.

U.S. Rep. Donald McEachin in Virginia is so fired up, he's taking action from the investigation. Now he's joined by U.S. Rep. Steve Cohen in Memphis, Tennessee.

Cohen is pledging to create a bill to stop deadbeat companies who owe taxes from getting more government contracts.

Our investigation found at least 125 companies who owe the IRS a total of more than $40 million in unpaid taxes, being awarded huge federal government contracts. These companies are scoring nearly $134 million in tax money despite defaulting on their taxes for years.

"It is double dipping! Absolutely! And that's the reaction any normal person should have," said McEachin.

For example, Universal Electronics in Nashville holds 11 government contracts worth $70,203.77. But,the company is saddled with tax liens totaling $160,322.58.

Universal Electronics will likely never pay those taxes, because court records confirm it filed for bankruptcy.

"Pursuant to your call, I checked into it," said Cohen. He's pledging to draft a bill mandating tax lien checks on every company bidding for a government contract.

"There would be a condition preceding to getting the contract to verify that you're not delinquent in paying your taxes, and that would be necessary addition before you could get the contract," said Cohen.

The IRS is taking responsibility for a problem that excluded some government contractors from a new electronic tax collection system. It's pledging a fix by February 2018.

Cohen said that bill would not likely pass before the IRS's February deadline, but if the IRS fails to fix the system, and this bill does become law, it would go a long way to blocking businesses from getting federal tax dollars.


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