FAR 52.209-12—Certification Regarding Tax Matters.
Plain-English Summary
FAR 52.209-12 is a solicitation provision that requires certain offerors to certify their federal tax compliance when the proposed total contract price, including options, will exceed $7 million. It implements section 523 of Division B of the Consolidated and Further Continuing Appropriations Act, 2015, and any similar later appropriations restrictions, so its purpose is to screen higher-dollar awards for basic tax responsibility issues before contract award. The provision focuses on three specific representations: whether the offeror has filed all required federal tax returns for the prior three years, whether it has been convicted of a criminal offense under the Internal Revenue Code, and whether it has been notified of an unpaid federal tax assessment that remains unsatisfied. It also explains important exceptions for installment agreements, offers in compromise approved by the IRS and not in default, and non-frivolous administrative or judicial proceedings. In practice, this provision affects proposal preparation, responsibility review, and award eligibility, because an inaccurate certification can create award risk, trigger follow-up inquiry, or lead to serious compliance consequences.
Key Rules
Applies Above $7 Million
The certification is required only when the offeror is proposing a total contract price over $7 million, counting options. If the threshold is not exceeded, this provision does not require the tax certification.
Three-Year Return Filing
The offeror must certify, to the best of its knowledge and belief, that it has filed all federal tax returns required during the three years before the certification date. This is a broad compliance statement covering required returns, not just income tax returns.
No IRC Criminal Conviction
The offeror must certify that it has not been convicted of a criminal offense under the Internal Revenue Code of 1986. This is a separate representation from tax filing status and addresses criminal tax misconduct.
No Unsatisfied Tax Assessment
The offeror must certify that it has not been notified more than 90 days before certification of any unpaid federal tax assessment that remains unsatisfied. The rule is aimed at unresolved federal tax liabilities that have been formally assessed and noticed.
Exceptions for Approved Remedies
An unpaid assessment does not disqualify the offeror if it is covered by an IRS-approved installment agreement or offer in compromise that is not in default, or if the assessment is the subject of a non-frivolous administrative or judicial proceeding. These exceptions recognize legitimate dispute-resolution and payment arrangements.
Knowledge and Belief Standard
The certification is made 'to the best of its knowledge and belief,' which means the offeror must make a reasonable, good-faith inquiry before certifying. It is not a strict liability statement, but it does require diligence and internal verification.
Solicitation Provision, Not Clause
This is a provision inserted in the solicitation, so it is used at the offer stage rather than as a contract administration clause. Its practical role is to support pre-award responsibility and eligibility determinations.
Responsibilities
Offeror
Review its federal tax compliance status before submitting an offer, including return filing history, any IRC criminal convictions, and any unpaid federal tax assessments. If the proposed total contract price exceeds $7 million, complete the certification accurately and in good faith, taking into account any IRS-approved installment agreement, offer in compromise, or pending non-frivolous proceeding.
Contracting Officer
Include the provision in applicable solicitations as prescribed, evaluate whether the $7 million threshold is met, and use the certification as part of the pre-award review. If the certification raises concerns or is incomplete, the contracting officer should seek clarification or follow applicable responsibility procedures before award.
Agency
Ensure solicitations for covered acquisitions include the required provision and that acquisition personnel understand when the certification applies. The agency should also maintain processes for handling tax-related responsibility information consistently and in coordination with other pre-award review requirements.
IRS / Tax Authorities
Administer tax assessments, installment agreements, offers in compromise, and related proceedings that may affect whether an offeror can truthfully certify. IRS actions and records are central to determining whether an assessment is unsatisfied or whether an exception applies.
Practical Implications
Offerors bidding on awards over $7 million should verify tax status early, because the certification can become a last-minute proposal risk if internal records are incomplete or outdated.
The biggest pitfall is treating the certification as a narrow income-tax question; it covers all required federal tax returns and any relevant federal tax assessment issues.
Offerors with tax disputes are not automatically disqualified, but they must be able to show the assessment is covered by an approved installment agreement, an approved offer in compromise, or a non-frivolous proceeding.
Contracting officers should pay attention to the exact threshold, including options, because miscalculating the total contract price can lead to using or omitting the provision incorrectly.
Because the statement is made to the best of the offeror’s knowledge and belief, contractors should document their internal review and coordinate with tax counsel or finance staff before certifying.
Official Regulatory Text
As prescribed in 9.104-7 (e) , insert the following provision: Certification Regarding Tax Matters (Oct 2025) (a) This provision implements section 523 of Division B of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235), and similar provisions, if contained in subsequent appropriations acts. (b) If the Offeror is proposing a total contract price that will exceed $7 million (including options), the Offeror shall certify that, to the best of its knowledge and belief, it (1) Has □ filed all Federal tax returns required during the three years preceding the certification; (2) Has not □ been convicted of a criminal offense under the Internal Revenue Code of 1986; and (3) Has not □ , more than 90 days prior to certification, been notified of any unpaid Federal tax assessment for which the liability remains unsatisfied, unless the assessment is the subject of an installment agreement or offer in compromise that has been approved by the Internal Revenue Service and is not in default, or the assessment is the subject of a non-frivolous administrative or judicial proceeding. (End of provision)