Raises Aren’t Allowed – But Bonuses Are Just Fine

June 3, 2014

IRS employees who had been disciplined for tax and conduct issues were rewarded with monetary awards or time off, according to a report issued by Treasury Inspector General for Tax Administration J. Russell George.

The report concluded that, for the most part, the reward program for IRS employees complied with federal regulations.

“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’ charge of assuring the integrity of the system of tax administration,” George noted.

The report found that between October 2010 and December 2012, 2,800 employees who had been disciplined received more than $2.8 million in bonuses and 27,000 in time-off awards. Of this group, 1,100 employees with tax compliance issues received over $1 million and 10,000 hours of paid leave.

According to the report, the IRS considers prior conduct before awarding permanent pay increases – but not when awarding bonuses.

Senators Kelly Ayotte, R-N.H., and Claire McCaskill, D-Mo., have introduced the Stop Wasteful Federal Bonuses Act. It would prohibit bonus awards to any federal worker whose conduct violates agency policy in a way that could lead to their suspension or firing.

It isn’t clear how this new law, if enacted, would improve the situation. Since 1998, there has been a law on the books calling for the removal of any IRS employees found to have intentionally failed to pay their federal tax.

“Those who make their living by collecting taxes cause the people to starve; when the people starve, the tax collectors, having no one to tax starve also.” – Lao Tzu