If You Owe Back Taxes, Do You Get A Bonus? IRS Employees Do

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When an average American is delinquent in his Federal income tax payments, the Internal Revenue Service can make his life pretty unpleasant.

But when an IRS employee owes back taxes — and there are thousands who do — not only does he get consideration from his government employers that average Americans don’t get; he also goes home with bonus pay.

According to the U.S. Treasury Inspector General for Tax Administration, the IRS paid out $2.8 million in bonuses to more than 2,800 employees “with recent substantiated conduct issues resulting in disciplinary action,” including $1 million to “more than 1,100 IRS employees with substantiated Federal tax compliance problems.”

Those payouts, which also included paid time off and step increases in the government’s merit job system, took place between October 2010 and the start of 2013. The final IG report was published internally on March 21, but was released to the public this week.

Although the IG report attempts to explain that enforcing tax law and dealing with IRS employees through the merit system are two endeavors segregated by government policies, it nonetheless remarks that rewarding IRS employees who are delinquent in their tax payments represents an apparent conflict of interest:

With few exceptions, the IRS does not consider tax compliance or other misconduct when issuing performance awards or most other types of awards. Governmentwide (sic) policies do not provide guidance on providing awards to employees with conduct issues. The IRS Restructuring and Reform Act of 1998 does not specifically mention awards, but does make mandatory the removal of IRS employees who are found to have intentionally committed certain acts of misconduct, including willful failure to pay Federal taxes. Thus, while not specifically prohibited, providing awards to employees with conduct issues, especially those who fail to pay Federal taxes, appears to create a conflict with the IRS’s charge of ensuring the integrity of the system of tax administration.

The report further recommends that the IRS consider “the feasibility of implementing a policy requiring management to consider conduct issues resulting in disciplinary actions, especially the nonpayment of taxes, prior to awarding all types of performance and discretionary awards.”

According to the summary, the IRS has agreed with that advice and is conducting a study with a June 30 deadline that might — might — lead to the development of such a policy.

Ben Bullard

Reconciling the concept of individual sovereignty with conscientious participation in the modern American political process is a continuing preoccupation for staff writer Ben Bullard. A former community newspaper writer, Bullard has closely observed the manner in which well-meaning small-town politicians and policy makers often accept, unthinkingly, their increasingly marginal role in shaping the quality of their own lives, as well as those of the people whom they serve. He argues that American public policy is plagued by inscrutable and corrupt motives on a national scale, a fundamental problem which individuals, families and communities must strive to solve. This, he argues, can be achieved only as Americans rediscover the principal role each citizen plays in enriching the welfare of our Republic.

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