Senator Chuck Grassley (R-Iowa) yesterday wrote to the IRS asking the agency to explain why it has not terminated employees that have willfully violated tax law.
The letter is in response to a Treasury Inspector General for Tax Administration (TIGTA) report that found the agency was not properly disciplining employees.
The Restructuring and Reform Act of 1998 (RRA 98) requires the IRS to terminate employees that have committed acts of misconduct including willful violations of tax law. In reality, only 25 percent of employees that had willfully violated tax law were terminated by the agency and more than 60 percent of employees were disciplined in a way that did not involve termination.
As Grassley notes in his letter, RRA 98 gave the IRS some discretion on personnel flexibility but outlined clear instances for employee termination including “willful violation of tax law.” As the letter states:
“These changes created a clear and direct path to termination for employees who commit ten specific offenses, two of which are the willful tax violations at issue here.”
Grassley notes that the IRS’s improper use of this discretion is problematic given the serious nature of the offense. As the letter states:
“Willful violation of tax law is a serious offense and the presumption is an employee guilty of the offense shall be terminated.”
Worse still, the TIGTA report found that many of the IRS employees soon received “promotions, performance awards, and permanent pay increases” after their noncompliance cases were closed.