The IRS awards millions of dollars in bonsues to employees who have been disciplined for tax compliance problems and other conduct issues, according to an audit. (Mark Wilson / Getty Images)
Thousands of IRS employees who received disciplinary actions for misconduct also received bonuses, according to an inspector general report released April 22.
The Treasury Inspector General for Tax Administration found that between Oct. 1, 2010 and Dec. 31, 2012 more than 2,800 employees with conduct issues got more than $2.8 million in bonuses and 27,000 hours in time-off awards.
Of those, more than 1,100 IRS employees with tax compliance problems received more than $1 million in bonuses and 10,000 hours in time-off awards..
The agency stayed within federal guidelines on its award totals.
“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,” said the IG, J. Russell George. “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.”
However, the problematic bonuses and awards are only a small portion of IRS awards. In fiscal 2011 the IRS awarded almost $92 million in cash and almost 520,000 hours of time off to 70,500 of its approximately 104,400 employees. The year before, $86 million and nearly 490,000 hours went to 67,870 of 98,000 employees.
TIGTA recommended that the IRS study the feasibility of implementing a policy to consider conduct issues and disciplinary records before awarding any bonuses. The IRS said it would conduct a study by June 30, 2014 on implementing such a policy.