Yet another report from the Treasury Inspector General for Tax Administration (TIGTA) has found incredible abuses within the IRS — this time for allowing nearly 1,000 tax-evading employees to keep their jobs.
The TIGTA’s April report, which was just made public, reveals that 960 IRS employees (out of a total of 1,580) who intentionally dodged their federal tax obligations were spared firing by former IRS Commissioner Steven T. Miller and his predecessors dating back to 2003.
Current IRS Commissioner John Koskinen’s short career heading the agency is not covered by the report, which ends its investigation of cases closed from fiscal year 2004 through fiscal year 2013.
The audit was conducted specifically to determine “whether the IRS had an effective process in place to address willful violations of tax law by employees,” according to TIGTA’s summary.
Of course, TIGTA found the IRS’s process to be ineffective.
Perhaps this should go without saying, but federal law requires the IRS to fire employees who’ve been determined to have “committed certain acts of misconduct, including willful violations of tax law, unless such penalty is mitigated by the IRS Commissioner,” according to the report. “… [T]he IRS must ensure that its employees comply with the tax law in order to maintain the public’s confidence.”
But, 61 percent of the time, the commissioner opted for remedial actions that amounted to job bailouts for the offenders.
From the audit:
TIGTA reviewed records for cases closed in Fiscal Years 2004 through 2013 (prior to the term of the current Commissioner). For this period, IRS records show that 1,580 employees were found to be willfully tax noncompliant. While the RRA 98 states the IRS shall terminate employees who willfully violate tax law, it also gives the IRS Commissioner the sole authority to mitigate cases to a lesser penalty. Over this 10-year period, 620 employees (39 percent) with willful tax noncompliance were terminated, resigned, or retired. For the other 960 employees (61 percent) with willful tax noncompliance, the proposed terminations were mitigated to lesser penalties such as suspensions, reprimands, or counseling.
Who better to finagle his way out of paying taxes than the guy with an insider’s knowledge of how the system works? And the audit suggests that’s exactly what happened in many cases. “These cases,” it reveals, “included willful overstatement of expenses, claiming the First-Time Homebuyer Tax Credit without buying a home, and repeated failure to timely file required Federal tax returns.”
Lest there be any doubt about where the buck stops in this decade-long trend, TIGTA goes out of its way to single out the commissioner.
“In cases that were mitigated, files included mitigating factors as well as evidence that violations of tax law were willful; however, the basis for the Commissioner’s decision to mitigate was not clearly identified in the case files,” the audit asserts.
Even though some of the cases involved repeat offenders and others with a history of aggravating misconduct, “the proposed terminations were mitigated by the IRS Commissioner.”