For millions of Americans who spent recent weeks sweating blood over their tax returns to make sure they don’t draw unwanted attention from the Internal Revenue Service, the recent news has to be maddening.
A report from the Treasury Inspector General for Tax Administration revealed that $2.8 million in bonuses were granted between Oct. 1, 2010 and Dec. 31, 2012 to IRS employees who had been cited for misbehavior including misuse of government credit cards, making violent threats and fraudulently claiming unemployment compensation. The kicker, though, was that some had failed to pay their taxes.
The Washington Post wrote that the report “said more than 1,100 employees who failed to pay their taxes received discretionary awards of more than $1 million in cash bonuses and more than 10,000 hours in extra paid vacation.” At least five of these staffers received bonuses “after being disciplined for intentionally
under-reporting their tax liabilities for multiple years, paying taxes late and under-reporting income,” The Post wrote.
In all, more than 2,800 out of 98,000 IRS employees received bonus awards within a year of being on the receiving end of disciplinary action by the agency.
But don’t add this to the list of scandals that have been coming out of the IRS over the past year. Although this all looks bad and seems unfair — try getting the IRS to cut you a check when you already owe back taxes — it was all perfectly legal. There appears to be no violation of federal or IRS guidelines in the bonus awards.
In fact, The Post said, “(t)he IRS’s contract with the National Treasury Employees Union bars the agency from considering bad conduct when making performance-based awards.
As for non-union employees, federal guidelines are silent on the subject.”
It adds insult to injury for taxpayers to learn that not only is serious misconduct overlooked when handing out taxpayer-funded bonuses, such lack of regard for ethics is mandated by the agency’s union contract. The union’s primary goal of protecting workers is at odds with what should be the greater concern: seeing that taxpayers dollars are wisely and efficiently spent.
The Treasury Inspector General report states the obvious when it says: “While not specifically prohibited by IRS policies, providing awards to employees with conduct issues, especially the failure to pay taxes owed to the Federal Government, appears to be in conflict with the IRS’s charge of ensuring the integrity of the system of tax administration. In addition, awards provided to these employees could be put to better use by providing employees who are compliant additional opportunities for awards.”
Responding to the report, the IRS “said it was in the process of developing a policy linking conduct to performance awards for executives and senior management,” The Post said. The IRS also said it “will consider” applying the same policy to all employees “if possible” — that is, if the union approves it.
The union’s president, Colleen Kelley, told USA Today that union leadership would review any such proposal for the “relatively small number of employees who may have” been awarded bonuses within a year of being disciplined.
If the IRS and its union don’t do away with this rule, Congress and the president should step in to fix it.
