Why did IRS give cash bonus to employees who owe taxes?
The old saying that “no news is good news” is nearly a truism for the Internal Revenue Service. But the IRS, already under fire for alleged political bias in denying tax exempt status to conservative groups, made news again last week. It wasn’t good news.
The latest report has raised eyebrows and also questions about how the federal agency tasked with collecting income taxes spends some of the taxpayer dollars it collects. As is too often the case with government spending, there seems to be little concern because the government employees are spening OPM — other people’s money. They are spending revenue that they didn’t have to earn in the same sense someone in a for-profit business must earn it.
The Treasury Department’s Inspector General for Tax Administration issued a critical report, revealing that from 2010 to 2012, the IRS paid $2.8 million in cash bonuses to employees. About $1.1 million of that was given to employees who had “recent substantiated conduct issues resulting in disciplinary action.”
There are legitmate questions about the whole idea of bonuses for government workers. They are hired to do a job and to do that job with competence. A private business might award a bonus to an employee who lands a new client or helps increase profits substantially, but government workers seem rarely to fall into that category.
But the real kicker in the IRS bonus story is that about $1 million of the bonus money went to IRS employees who owe back taxes to the government. How could IRS managers award bonuses to people who work in tax collection or compliance, but have not complied with the law regarding their own taxes?
In addition to cash bonuses, the apparently exemplary IRS workers also received a total of 10,000 hours of extra time off. Accelerated pay-grade increases were awarded to 69 IRS employees.
Another troubling aspect of this story is that about two-thirds of IRS employees were given a bonus. Rewarding such a high percentage of workers, whether in a government or private-sector workforce, dilutes the meaning of a bonus, which should reward exemplary performance. It’s just not possible that two-thirds are exceptional workers. That’s not a knock on IRS workers or government workers. The same could be said of any workforce, public or private.
The only slightly positive aspect of this story is that the IRS says it agrees with the critical report. And, the bonuses cited in the report occurred before the new IRS Commissioner, John Koskinen, took on his new job. Maybe the heat Congress will direct at Koskinen and the IRS after lawmakers return from spring recess will reinforce a commitment to end or dramatically alter the IRS bonus program.
Given what’s been learned about the questionable IRS bonus program, there should now be serious concerns about similar wasteful and unnecessary bonus programs across other departments in the federal government. What kinds of bonuses being routinely awarded in the Department of Commerce, Department of Transportation, Department of Education or any other of the dozens of federal agencies?
News reports in 2012 revealed about $439 million in bonuses was given to federal workers in 2011. That report found that more than 100 federal employees received bonuses in excess of $42,000 and three got bonuses of $62,895. The report indicated bonuses are generally in decline, since Obama adminstration officials learned the extent of the practice.
The IRS bonus scandal puts more public scutiny on itself and other federal agencies to ensure that tax dollars are spent wisely, even if it’s OPM they’re spending.
