A report by J. Russell George, the Treasury inspector general for tax administration say more than 2,800 workers were awarded bonuses from October 2010 through December 2012 despite facing a disciplinary action in the previous year, including 1,150 who owed back taxes.
In the 2011 budget year, more than 70,000 IRS workers got cash bonuses totaling $92 million. In the 2012 budget year, nearly 68,000 workers got cash bonuses totaling $86 million.
George said, “These awards are designed to recognize and reward IRS employees for a job well done, and that is appropriate, because the IRS should encourage good performance. However, while not prohibited, providing awards to employees who have been disciplined for failing to pay federal taxes appears to create a conflict with the IRS’s charge of ensuring the integrity of the system of tax administration.”
There are no government-wide policies on providing bonuses to employees with conduct issues. However, a 1998 law calls for removing IRS employees who are found to have intentionally committed certain acts of misconduct, including willful failure to pay federal taxes. Other examples of misconduct by workers getting bonuses included misusing government credit cards for travel, drug use, violent threats and fraudulently claiming unemployment benefits.
The IRS said in a statement, “Even without a formal policy in place over the past four years, the IRS has not issued awards to any executives that were subject to a disciplinary action. We are also considering a similar policy for the entire IRS workforce, which would be subject to negotiations with the National Treasury Employees Union.”
The report said the IRS considers prior conduct before awarding permanent pay increases. “However, IRS officials stated that the IRS generally does not consider conduct issues when administering other types of awards.