The IRS Gave $1 Million in Bonuses to Employees Who Didn’t Pay Their Taxes

iodrakon/Shutterstock.com

More than 1,100 employees at the Internal Revenue Service received nearly $1.1 million in cash bonuses over two years despite not paying or underreporting their taxes, according to a new report.

In total, about 2,800 employees who were involved in misconduct that resulted in disciplinary action received a total of $2.8 million in bonuses between October 2010 and December 2012, the Treasury Inspector General for Tax Administration found. In addition to the cash awards, disciplined employees received 27,000 hours of extra paid time off and within-grade step increases, within one year of being reprimanded.

The IRS doesn’t consider tax compliance or disciplinary actions when doling out bonuses or other awards, the auditors found, except for employees in the Senior Executive Service. The federal government has not issued any guidance requiring agencies to factor in tax compliance when determining bonuses, but the 1998 IRS Restructuring and Reform Act required any delinquent employee to be terminated.

While the inspector general said giving tax delinquent employees bonuses is not technically prohibited, it “appears to be in conflict with the IRS’ charge of ensuring the integrity of the system of tax administration.”

IRS employees with tax issues -- which included understatement of tax liabilities, late payment of taxes and underreporting of income -- received more than 10,000 hours in time off awards, and 69 employees received step increases. Other disciplined workers receiving bonuses included those who misused government travel cards, violated drug or violence policies, and had other fraud issues. Disciplinary actions against those employees included written reprimands, suspensions or removal.

TIGTA recommended the IRS’ human capital officer should create a policy guidance to ensure the agency weighs disciplinary actions -- especially those taken against tax delinquents -- when awarding bonuses, which the IRS agreed to.

Agency officials told the auditors their collective bargaining agreement with the National Treasury Employees Union stated disciplinary action against an employee should “not preclude a performance award that would otherwise be granted,” though the agency agreed to look into the feasibility of changing the policy.

The issue of IRS bonuses previously came to light when the agency announced plans to cancel the awards entirely, but has since agreed to reinstate them.

(Image via iodrakon/Shutterstock.com)

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    Download
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    Download
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    Download
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    Download
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    Download
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    Download
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    Download

When you download a report, your information may be shared with the underwriters of that document.