Article: Defense contractors owe unpaid taxes; Privacy laws prevent Defense Department from seeking tax records

WASHINGTON (AP) - Privacy laws hamstring the Defense Department's ability to prevent government contracts from going to businesses that owe unpaid taxes, Pentagon and Internal Revenue Service officials said Thursday.

Their statements came after congressional investigators found that 27,000 defense contractors owed a total of $3 billion in unpaid taxes. Auditors at the General Accounting Office, the investigative arm of Congress, studied taxes owed in the budget year that ended Sept. 30, 2002.

The secrecy laws prevent the Defense Department from asking the IRS whether a prospective contractor is delinquent in its tax

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