White House plan to allow IRS to deduct dues from federal contracts

The Obama administration may push for legislation allowing the Internal Revenue Service to deduct dues on outstanding back taxes from federal contract payments. The debt collection strategy is being considered as part of efforts to reduce the federal deficit. A similar measure was adopted in 2004, but because of "technical error," regulators were only able to cull up to 15 percent of back tax dues. The White House's latest proposal will grant the IRS the freedom to pursue 100 percent of like debts, according to the Washington Business Journal. "This proposal, which was also included in the 2012 Budget, would correct the error and allow the Treasury to collect some of the sizable delinquent tax debt owed by Federal contractors," the report states, adding that it will generate some $141 million in revenue over the next 10 years. President Obama's deficit reduction plan, which was unveiled Monday, also included a proposal to allow federal officials to contact indebted individuals by cellphone. White House spokespeople have defended the measure by asserting it is merely reflective of Americans' chosen method of communication.