Friday, May 8, 2015

IRS promoted employees who cheated on their taxes, audit finds

The IRS refused to fire most of its own employees found to be cheating on their taxes — and in some cases even quickly turned around and promoted them within the year, according to an audit released Wednesday.
In about 60 percent of cases of “willful violations,” IRS managers found mitigating circumstances and refused to fire the employees, even though the law calls for that penalty. In some of those cases, the managers didn’t even document why they had overridden the penalty, said Treasury Inspector General for Tax Administration J. Russell George.
“Given its critical role in federal tax administration, the IRS must ensure that its employees comply with the tax law in order to maintain the public’s confidence,” Mr. George said. “Willful violation of the law by IRS employees should not be taken lightly, and the IRS commissioner should fully document decisions made to retain employees whom management has proposed be terminated.”


From 2004 to 2013, the IRS identified nearly 130,000 suspected cases of tax violations by its own employees and concluded about 10 percent of those were actual violations. Mr. George said the agency did a good job of spotting those issues.
Of those 13,000 cases, 1,580 were deemed to be intentional cheaters, and they were sent to managers for discipline. But in 60 percent of the cases, the managers refused to fire the employees.
Among the abuses were employees who repeatedly failed to file their returns on time, those who intentionally inflated their expenses and those who claimed the stimulus homebuyer’s tax credit without buying a home.

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