Dan Gilmore / May 7, 2015

IRS Leadership Gave Hundreds of IRS Tax Cheats Free Pass

The highest levels of IRS leadership have sheltered employees found willfully cheating on their taxes, according to a report by the Treasury Inspector General for Tax Administration. From 2003 to 2013, across the leadership of six tax commissioners — including current commissioner John Koskinen — the bureaucracy has protected 980 IRS employees who both worked for the agency and tried to cheat it out of tax money. During that decade, IRS management reviewed 1,580 cases when employees cheated on their taxes, by overstating the expenses they incurred, for example. Federal law requires that employees found cheating on their taxes are to be fired — and only special intervention from the tax commissioner can mitigate that outcome. Of those employees, however, just 400 were fired and 220 resigned or retired, but 960 others were spared by the commissioner’s intervention.

Just to clarify, these were not the unfortunate souls in the bureaucracy who made mistakes paying the government because of the IRS’s confusing tax code. (Between fiscal years 2004 and 2013, the IRS investigated its own employees for tax noncompliance over 18,300 times.)

The IG’s report found that discipline was meted out unfairly, that it “varied from case to case.” Some employees who falsely claimed the First-Time Homebuyer Tax Credit were suspended. Others were terminated. But it went further than that, the report said: “In addition to not being terminated for willful tax violations, some IRS employees also received promotions, performance awards, and permanent pay increases within one year after their willful tax noncompliance case was closed. Specifically, 108 of 364 employees with willful tax noncompliance cases closed between October 1, 2008, and September 30, 2013, received one or more awards, promotions, quality step increases.” It’s a wonder why the IRS, of all agencies, would want to retain (and reward!) such fundamentally dishonest employees. After all, aren’t Democrats fond of telling us how patriotic it is to pay more in taxes? That the tax commissioner has personally protected so many untrustworthy employees tells us all we need to know about the integrity of the IRS. More…

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