52.209-12
Certification Regarding Tax Matters
Offerors bidding on contracts over $5.5 million must certify their compliance with federal tax filing, payment, and criminal tax law requirements as a condition of eligibility.
Overview
FAR 52.209-12, Certification Regarding Tax Matters, requires offerors proposing a total contract price exceeding $5.5 million (including options) to certify their compliance with federal tax obligations. This provision is mandated by appropriations law and aims to ensure that large federal contractors are in good standing with the IRS. Offerors must certify that they have filed all required federal tax returns in the past three years, have not been convicted of a criminal offense under the Internal Revenue Code, and do not have any unresolved federal tax assessments unless they are under an approved payment plan or active dispute.
Key Rules
- Applicability Threshold
- Applies to solicitations where the total contract price (including options) exceeds $5.5 million.
- Certification Requirements
- Offerors must certify: (a) all federal tax returns have been filed for the past three years; (b) no criminal convictions under the Internal Revenue Code; (c) no unresolved federal tax assessments unless under approved arrangements or active dispute.
Responsibilities
- Contracting Officers: Must include this provision in applicable solicitations and verify receipt of certifications.
- Contractors/Offerors: Must accurately complete and submit the certification as part of their proposal if the contract exceeds the threshold.
- Agencies: Ensure compliance with appropriations law and maintain records of certifications.
Practical Implications
- This provision exists to prevent awarding large federal contracts to entities with significant unresolved tax issues or criminal tax convictions.
- Contractors must ensure their tax affairs are in order before bidding on large contracts, as false certifications can lead to penalties or disqualification.
- Common pitfalls include overlooking unresolved tax assessments or failing to disclose installment agreements or disputes with the IRS.