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IRS Urged To Immediately Correct Staff Bonus Shortcomings

by Mike Godfrey, Tax-News.com, Washington

20 February 2018


Kevin Brady (R-TX), Chairman of the House Ways and Means Committee, and Orrin Hatch (R-UT), his Senate counterpart, have called on the Internal Revenue Service to better screen bonuses paid to staff.

In an open letter to IRS Acting Commissioner David Kautter on February 15 they called for immediate action following a report from the Treasury Inspector General for Tax Administration (TIGTA), which found that, over the last two fiscal years, the IRS has disbursed almost USD1.8m in awards to 1,962 employees who had been subject to disciplinary actions.

House Ways and Means Committee Chairman Kevin Brady (R-TX) and Senate Finance Committee Chairman Orrin Hatch (R-UT) sent an open letter to IRS Acting Commissioner David Kautter on February 15 asking for immediate action, following a report from the Treasury Inspector General for Tax Administration (TIGTA) which found that over the last two fiscal years, the IRS has disbursed almost USD1.8, in awards to 1,962 employees who had been subject to disciplinary actions.

In an earlier audit report published in March 2014, TIGTA had found that between October 1, 2010, and December 31, 2012, more than 2,800 IRS employees with recent substantiated conduct issues received USD2.8m in monetary awards. In that audit report, TIGTA recommended that the IRS determine the feasibility of implementing a policy requiring the IRS to consider conduct issues, including tax compliance status, prior to issuing awards.

In its latest report, TIGTA also found that some employees who were previously identified as having received awards in spite of conduct or tax compliance issues in its 2014 audit report still received an additional USD200,000 in awards in FYs 2016 and 2017, after having again exhibited additional misconduct or tax non-compliance during that period.

TIGTA recommended that the IRS expand misconduct screening to consider employees with any level of disciplinary action prior to issuing awards, examine the federal tax compliance status of all employees before issuing awards, and comply with Treasury reporting requirements for awards. IRS management agreed with all three recommendations, stating that it would expand its screening procedures to include employees with any level of discipline and federal tax noncompliance prior to issuing awards and would comply with Treasury reporting requirements.

However, the Senators are urging more immediate action.

"In lieu of immediately implementing any of TIGTA's recommendations, the IRS has offered to assess the resource needs and timeline to integrate the necessary corrections for the screening of all disciplinary actions, an assessment that is not expected to be completed until January of 2019, nearly a year from now," Brady and Hatch wrote in the letter. "Given that this is the second time TIGTA has raised concerns about the IRS awards process for employees with conduct or tax compliance issues and that Treasury and Congress have both laid out clear expectations, we strongly believe that an assessment of resource needs and timeline to implement the recommendations will delay solving this very real and pressing problem."

TAGS: compliance | Finance | tax | tax compliance | employees | audit | Internal Revenue Service (IRS) | United States | Tax

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