Sources say the directive stems from the Government Accountability Office’s work over the last three years looking at different abuses of the federal tax system by contractors.
In a July 2008 report, GAO said the “IRS’s records showed that over 1.6 million businesses owed over $58 billion in unpaid payroll taxes, including interest and penalties. Of that amount, 70 percent of all unpaid payroll taxes are owed by businesses with more than a year (4 tax quarters) of unpaid federal payroll taxes, and over a quarter of unpaid payroll taxes were owed by businesses that accumulated tax debt for more than 3 years (12 tax quarters).”
GAO also looked at whether Medicare providers and grant recipients avoided paying federal taxes.
And the House in April 2008 passed a bill that would have established a policy that no U.S. government contracts or grants should be awarded to individuals or companies with seriously delinquent tax debts. The bill also would have required agencies to require prospective contractors to certify that they do not have such a debt and authorize the Secretary of the Treasury to disclose information describing whether they have such a debt.
Then-Sen. Obama sponsored the companion bill, but it never made it out of committee.
White House memo: http://www.federalnewsradio.com/docs/TaxDelinquencyMemorandum.docRemarks of President Barack Obama – As Prepared for Delivery – Tax Delinquency Memorandum