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IRS Gave Bonuses To Employees Who Cheated On Taxes

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The US Internal Revenue Service is known to punish taxpayers who are delinquent paying their taxes. That is, unless you are an IRS employee.

An audit revealed that the agency showered bonuses and paid time-off on employees who had been recently disciplined or had tax problems themselves.

Rewarding tax cheats

Nearly $1 million in bonuses was given to IRS employees who were themselves in tax trouble with the IRS.  The tax issues included willful understatement of tax liabilities, late payments and under-reporting of income, according to the report issued by the Treasury Inspector General for Tax Administration.  Current federal regulations do not require the IRS to consider tax compliance of IRS employees when issuing bonuses. The IRS, however, says it will follow the audit’s suggestion and change the policy.

The policy of rewarding IRS employees who cheat the IRS “appears to create a conflict with the IRS’s charge of ensuring the integrity of the system of tax administration,” the report said.

But it gets better.

Disciplined IRS employees receive bonuses despite misconduct

More than $2.8 million and thousands of hours of paid time-off was awarded to a variety of employees who were formally disciplined for misconduct at the agency.  Over the past four years, the IRS says it has not issued awards to any executives who were subject to disciplinary action, according to a report.  The tax collector is now considering extending that policy to all employees.

“We strive to protect the integrity of the tax system, and we recognize the need for proper personnel policies,” the agency said in a statement.

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