Thursday, May 7, 2015
The Treasury Inspector General for Tax Administration yesterday released Review of the Internal Revenue Service’s Process to Address Violations of Tax Law by Its Own Employees (2015-10-002):
According to Section 1203 of the IRS Restructuring and Reform Act of 1998 (RRA 98), the IRS shall terminate employment of any IRS employee if there is a final determination that the employee committed certain acts of misconduct, including willful violations of tax law, unless such penalty is mitigated by the IRS Commissioner. As the agency primarily responsible for administering Federal tax law, the IRS must ensure that its employees comply with the tax law in order to maintain the public’s confidence.
TIGTA reviewed records for cases closed in Fiscal Years 2004 through 2013 (prior to the term of the current Commissioner). For this period, IRS records show that 1,580 employees were found to be willfully tax noncompliant. While the RRA 98 states the IRS shall terminate employees who willfully violate tax law, it also gives the IRS Commissioner the sole authority to mitigate cases to a lesser penalty. Over this 10-year period, 620 employees (39 percent) with willful tax noncompliance were terminated, resigned, or retired. For the other 960 employees (61 percent) with willful tax noncompliance, the proposed terminations were mitigated to lesser penalties such as suspensions, reprimands, or counseling.
TIGTA’s review of a judgmental sample of 34 cases of willful tax violations found that employees with similar violations received different discipline. In cases that were mitigated, files included mitigating factors as well as evidence that violations of tax law were willful; however, the basis for the Commissioner’s decision to mitigate was not clearly identified in the case files. Some employees had significant and sometimes repeated tax noncompliance issues, and a history of other conduct issues. Moreover, management had concluded that the employees were not credible. Nonetheless, the proposed terminations were mitigated by the IRS Commissioner. These cases included willful overstatement of expenses, claiming the First-Time Homebuyer Tax Credit without buying a home, and repeated failure to timely file required Federal tax returns.
- Accounting Today, IRS Didn't Fire Hundreds of Lawbreaker Employees
- The Blaze, IRS Watchdog: Only 39 Percent of IRS Workers Who Cheated on Their Taxes Had to Leave the Agency
- Daily Caller, IRS Employees Openly Cheated Taxes, Got Promoted Anyway
- Forbes, 61% Of IRS Employees Caught Willfully Violating Tax Law Aren't Fired, May Get Promoted
- The Hill, Tax Cheats Keep Jobs at IRS, Audit Finds
- IJReview, Investigation Into the Internal Revenue Service Finds the Ultimate Hypocrisy by Over 1500 Employees
- News Busters, NBC, ABC Ignore IRS Employees Evading Taxes and Getting Promoted
- Wall Street Journal, Watchdog: Most Tax Violators at IRS Weren’t Fired
- Washington Times, IRS Promoted Employees Who Cheated on Their Taxes, Audit Finds
- The Week, Nearly 1,600 IRS Employees Evaded Taxes
- WND, IRS Refuses to Fire Employees For Cheating on Taxes