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New Report: IRS Ignored Employee Misconduct, Tax Violations Over Ten Year Period

May 06, 2015

WASHINGTON — Today, House Ways and Means Oversight Subcommittee Chairman Peter Roskam (R-IL) highlighted a new report from the Treasury Inspector General for Tax Administration (TIGTA) that discovered over a ten-year period, the Internal Revenue Service (IRS) repeatedly retained employees who willfully violated tax law and were guilty of other instances of misconduct.  In response to these findings, Chairman Roskam released the following statement.

“Earlier this year, we learned the IRS rehired hundreds of employees formerly fired for performance or misconduct issues, including improperly accessing private taxpayer information. Today, we also learn that the agency acted with impunity in purposely refusing to fire a majority of employees who violated tax law, including some repeat offenders with other documented misconduct issues. The IRS owes the American people an explanation for this display of bureaucratic incompetence. To argue that budget cuts provide ‘a tax cut for tax cheats’ while harboring employees who violate the laws they are supposed to enforce quite frankly defies logic. The gulf of trust between taxpayers and the IRS has never been wider, and the IRS can and must do better.”

The TIGTA report finds that, of employees who willfully violated tax law, over 60 percent were retained by the IRS.  TIGTA also reviewed 34 cases in depth, and more than half of the employees with tax issues had other misconduct issues.

Under the law, IRS employees who have been found to have willfully broken the tax laws are to be fired, unless the IRS Commissioner personally intervenes to prevent the firing. The report finds that in all cases the IRS Commissioner failed to document why he lessened the penalty for the employees’ misconduct.

The report also shows that roughly 30 percent of employees with willful tax noncompliance cases received awards and promotions within a year. That includes almost $145,000 performance awards, 900 hours in time-off awards, more than 30 promotions, and four permanent pay increases.

NOTE: In February, Chairman Roskam sent a letter to IRS Commissioner John Koskinen demanding to know why the IRS rehired hundreds of former employees who were previously terminated for performance or conduct issues, including the mishandling of taxpayer information. This discovery came as a result of an audit report released by Treasury Inspector General for Tax Administration in December 2014. Chairman Roskam’s full letter can be found here.