In a 10 year period, there were 1,580 Internal Revenue Service employees who willfully refused to pay taxes to the IRS, as reported by the Treasury Inspector General for Tax Administration (TIGTA) on April 14, 2015. 620 (39%) of these people were either terminated, retired, or resigned. The remaining 61% (960 people) received penalties, which included one of these consequences: counseling, suspension or reprimand.
When the IRS was questioned about the penalties assessed, the actions taken were defended by the IRS, and their response was as follows: “It is important to note that the IRS has a more than 99% tax compliance rate; the highest of any major federal agency”. The Restructuring and Reform Act of 1998 (RRA 98) states that the IRS must fire employees who purposely refuse to pay taxes. The IRS Commissioner can reduce the penalties however the Treasury Inspector (TIGTA) noticed that the IRS Commissioner was not documenting reasons for penalty reductions.
As a result, the IRS Commissioner said there will be more documentation in the future. It was also said that in a TIGTA review of 34 cases it was found that there was a “willful overstatement of expenses, such as claiming the First-Time Home Buyer Tax Credit without buying a home, and repeated failures to timely file federal tax returns.”
As Americans, we expect the agency in charge of making sure we pay our taxes will ensure its own employees will be in compliance with tax filings and payments. Perhaps the Internal Revenue Service should have mandatory audits for employees to guarantee they have paid their taxes appropriately. It may be that some see working for the IRS as a way to guarantee they won’t get caught for claiming expenses they aren’t entitled to deducting.
What do you think? Would it be fair to automatically audit all IRS employees? Should a certain percentage be subject to audit each year and therefore each employee is at risk for a review and would then (hopefully) file their returns accurately? It’s an interesting issue to contemplate. Please leave a comment as we’d love to hear your thoughts on this topic!
