IRS employees with conduct issues receive bonuses, TIGTA reports

BY SALLY P. SCHREIBER, J.D.

On Tuesday, the Treasury Inspector General for Tax Administration (TIGTA) released a report concluding that the IRS’s awards program, which awards cash and compensatory time off to a large number of IRS employees, did not consider employee misconduct, including tax compliance issues, in making these awards.
 
Although the IRS complied with federal requirements to reduce the number and amount of award expenditures, it does not have any procedures to ensure awards are not going to employees with conduct issues. According to TIGTA, during the period under review, more than 1,100 IRS employees with substantiated federal tax compliance problems received cash awards, time-off awards, and quality step increases within a year after the IRS substantiated their tax compliance problem.

No law specifically prohibits the IRS from giving awards to these employees, but TIGTA pointed to the provision in the IRS Restructuring and Reform Act of 1998, P.L. 105-206, that requires the removal of IRS employees who have committed certain acts of misconduct, including willful failure to pay federal taxes. This provision conflicts with the IRS’s current policy of not considering tax compliance when deciding to reward employees.

The IRS agreed to implement TIGTA’s recommendation for changing this policy by having its Human Capital Officer conduct a study by June 30, 2014, to introduce a policy to require management to consider conduct issues resulting in disciplinary actions before it awards all types of performance awards.

Sally P. Schreiber ( sschreiber@aicpa.org ) is a JofA senior editor.

SPONSORED REPORT

Tax reform complicates year-end tax planning

Get your clients ready for tax season with these year-end tax planning strategies, which address how to make the most of recent tax law changes, such as the new deduction for qualified business income and the cap on the deductibility of state and local taxes.

VIDEO

What RPA is and how it works

Robotic process automation is like an Excel macro that can work on multiple applications, says Danielle Supkis Cheek, CPA. RPA can complete routine, repetitive tasks such as data entry, freeing up employee time from lower-level chores.