Pass-through businesses like S-corps and partnerships that are bidding for federal contracts will need to be extra cautious about ensuring individual executives and shareholders pay outstanding tax liabilities now that the federal government has finalized rules barring tax cheats and convicted felons from such awards.
On Thursday, the U.S. Department of Defense, NASA and General Services Administration issued a regulation — unchanged from the interim form despite public criticism — that prohibits the federal government from awarding contracts to corporations that have a delinquent federal tax liability or felony conviction, unless a suspension or debarment official concludes that such an action is unnecessary.