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.
