The IRS is failing to fire employees who have willfully violated tax law, according to a report released today by the Treasury Inspector General for Tax Administration (TIGTA).
Under the Restructuring and Reform Act of 1998 (RRA 98) the IRS is legally required to terminate employees that have committed acts of misconduct including willful violations of tax law. However, TIGTA’s review of IRS practices found that the agency is failing to terminate these employees despite the serious nature of their transgressions. As the report states:
“Our review of a judgmental sample of 34 cases found that some employees, who management had concluded were not credible, with significant and sometimes repeated tax noncompliance issues, or a history of other conduct issues, were not terminated.”
In fact, as the reports notes, only a fraction of the employees found to have willfully violated tax law were fired. The majority of employees received far more lenient punishments:
“More than 25 percent, or 400, of the willful employee tax noncompliance cases resulted in termination of the employee…. More than 60 percent of employees, or 960, with willful tax noncompliance cases had their discipline mitigated to a penalty lower than termination.”
If that were not bad enough, many of these same employees received bonuses and promotions from the IRS within a year after their noncompliance case. As the reports says:
“In addition to not being terminated for willful tax violations, some IRS employees also received promotions, performance awards, and permanent pay increases within one year after their willful tax noncompliance case was closed.”