The U.S. Census Bureau is dealing with a $7 million accounting shambles after former President Donald Trump’s administration ordered the federal agency to halt payroll payments for some employees, including many temporary 2020 census workers, last year.
In the latter months of 2020, the agency was one of several government agencies authorized to cease collecting certain workers’ part of a payroll tax that helps sustain the Social Security system. Employees earning less than $4,000 before taxes each pay period qualified for the deferral.
“In total, $7,078,909 in payroll tax collections were deferred for 177,964 temporary employees,” the bureau confirmed in a statement.
During the coronavirus outbreak, Trump highlighted the effort as a method to secure “bigger paychecks for working families.” The previous government said that it will attempt to persuade Congress to waive the payroll taxes. However, since politicians did not act, the additional money basically constituted a temporary debt that employees had to repay later.
It’s also posed an accounting difficulty for the agency, which temporarily engaged hundreds of thousands of personnel for last year’s national head count.
“We determined that 147,619 employees owed substantially less than what it would cost to collect the debt from them,” said the agency, which did not respond to queries about the total amount of money the bureau has chosen to cease attempting to collect and how it plans to pay those expenses.
According to the agency, it has issued letters and emails to around 28,000 former census employees who owe back taxes.
“It’s kind of a shock seeing that email from the Census Bureau just so long after the fact,” says Alex Almeida of Phoenix, who received notices in September, close to a year after ending a clerk job at a local census office in November 2020. “It was very upsetting in a way, like this is the thanks we get for all our efforts.”
According to the IRS, the deadline for paying delayed taxes is the end of current year.
Trump did the same thing to other employees of the Federal government.
Trump’s administration had an increase in their tax bills as they are being asked to pay payroll taxes that Trump has postponed.
According to Politico, officials of Trump’s administration got letters demanding payment of postponed Social Security taxes, with at least one bill totaling $1,500.
“If the indebtedness is not paid in full within 30 calendar days, we intend to forward this debt to the Department of Treasury, Treasury Offset Program, for further collection,” a copy of a letter sent May 18, 2021, by an accounting officer from the Office of Administration reads.
In a message to Treasury Secretary Steven Mnuchin dated August 8, 2020, Trump established the program, instructing Mnuchin to defer some payroll taxes in order to “send money straight in the pockets of American workers” who needed it most.
Because the pandemic was “of sufficient severity and magnitude to warrant an emergency declaration,” Trump bypassed Congress to make the change.
As many as 1.3 million government employees may have had some of their payroll taxes deferred as a result of the legislation. Earners who make less than $4,000 every two weeks would be exempt from paying the 6.2 percent tax from September to the end of the year under the plan.
According to Politico, the government is now seeking for those postponed taxes. Several former administration officials were described in the report as calling the proposals “unacceptable.” “It’s just a very awful circumstance,” one person stated.
Another former official called her $1,300 bill “unacceptable,” saying she and her colleagues “gave our time and effort to this agency and this is how we’re getting paid back.”
Another stated that being asked to pay almost $1,200: “It’s just a very unfortunate situation.”
It’s a minor addition to Trump’s widely panned economic stimulus plan from last summer.
He issued an executive order in August permitting employers to defer paying their workers’ share of the 12.4% Social Security tax for the remainder of the year. The goal was to increase consumer spending by placing more money in millions of people’s pockets.
Employers in the private sector, on the other hand, were largely opposed to the project, partly because they believed workers would be unprepared to repay the funds.
It was, however, necessary for federal employees earning less than $4,000 per biweekly paycheck, and it went into effect in September.
Trump has stated numerous times that he expects Congress to cancel the debts in the future. Legislators did not do so, but they did agree to allow people extra time to repay the money. The IRS had originally requested that the money be repaid between January and the end of April this year, to match the four-month length of the deferral, but Congress agreed to let them the full year to do so.
A “Voluntary Repayment Agreement” was attached to the letter, with the option to pay by credit or debit card, according to Politico.
One anonymous Trump appointee stated that Trump had a “good plan,” but, “I just wish I had the option to opt-out.”