Eligibility

Can you bid on federal contracts if you owe back taxes?

Quick Answer: Federal tax delinquency over $10,000 requires disclosure and may affect contract award. Serious delinquency can result in non-responsibility determination or prohibition from award under certain appropriations.

As of 2024FAR 9.104-5

Detailed Answer

Tax obligations affect federal contracting eligibility: **Disclosure requirements:** - Must disclose federal tax delinquency over $10,000 - Required in SAM.gov representations - Applies to unpaid taxes where all remedies exhausted - Includes taxes with outstanding IRS lien **Impact on contracting:** - Contracting officer considers in responsibility - Large delinquencies raise serious concerns - May request information about payment plans - Could result in non-responsibility finding **Prohibitions:** - Some appropriations acts prohibit awards to tax delinquents - DOD, DHS, and other agencies have specific restrictions - Applies when incorporated into solicitation - Check specific solicitation requirements **What counts as delinquent:** - Final tax liability assessed by IRS - No longer subject to administrative or judicial review - Not currently under payment agreement - Outstanding IRS lien filed **What doesn't count:** - Taxes under appeal or dispute - Taxes covered by installment agreement - Taxes under offer in compromise - State/local taxes (federal only) **Addressing tax issues:** - Establish IRS payment plan - Remove lien through payment or agreement - Disclose honestly even if problematic - Seek professional tax advice **Best practices:** - Resolve tax issues before pursuing contracts - Keep current on all tax obligations - Document payment agreements - Update SAM when status changes

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