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On January 20, 2010, the Obama administration issued a directive that will prohibit federal contractors who are delinquent on their taxes from receiving new government contracts.  

The White House estimates the total amount in unpaid taxes owed by government contractors to be more than $5 billion. According to the Obama Administration, "[t]oo often, Federal contracting officials do not have the most basic information they need to make informed judgments about whether a company trying to win a Federal contract is delinquent in paying its taxes."  

Accordingly, in an effort to provide "contracting officials the tools they need to protect taxpayer dollars," the President asked the Office of Management and Budget ("OMB"), working with the Treasury Department and other federal agencies, to analyze the practices of contracting officers and debarring officials "in response to contractors' certifications of serious tax delinquencies." Furthermore, President Obama directed OMB to provide him with its general recommendations — including a plan to make contractor certifications available in a government-wide database — within 90 days.  

In addition to the Administration's directives for OMB, the President also ordered the Internal Revenue Service to conduct a review of the overall accuracy of companies' claims about tax delinquency to be sure that a company is telling the truth when it says it is paying taxes.  

Certain federal contractors who are denied a new government contract or otherwise penalized for an alleged tax delinquency (particularly if the alleged delinquency has been properly appealed) may be able to challenge such a determination.