IRS Responds to TIGTA Report on Bonuses

As mentioned in today’s “Bramwell’s Lunch Beat” via an article from the USA Today, a new report from the Treasury Inspector General for Tax Administration (TIGTA) found that the IRS doled out $2.8 million in bonuses to personnel with disciplinary issues – more than $1 million of which went to employees who hadn’t paid their federal taxes – between October 1, 2010, and December 31, 2012.

In response to TIGTA’s findings, the IRS’s chief human capital officer, David Krieg, said he plans to conduct a study by June 30, 2014, that will examine a policy requiring management to consider employee conduct issues prior to awarding performance and discretionary awards.

He also noted the agency was in the process of developing a policy tying conduct to performance awards for executives and senior-level employees.

“We would like to note that, even without a formal policy in place, over the past four years the IRS has not issued awards to any executives that were subject to a disciplinary action,” Krieg wrote.

A similar policy for the entire IRS workforce could be next, but Krieg said such a policy would be subject to negotiations with the National Treasury Employees Union (NTEU).

NTEU President Colleen Kelley told the USA Today on Tuesday that the union would review any proposed changes to its contract for the “relatively small number of employees who may have had some overlap between a performance award review period and a conduct issue.”

Krieg also noted that few agencies have implemented a policy linking conduct and consideration for performance awards.

“Of the 15 federal and 13 state policies we examined, only one agency specifically prohibited granting an award if conduct issues were present,” he wrote. “ However, some federal and state agencies do consider how severe or recent the offense was in deciding whether to grant an award.”

TIGTA found that 1,146 IRS employees who hadn’t paid their federal taxes not only received $1,068,912 in cash awards, but they also were given 10,582 hours of paid time off. Sixty-nine of those employees were given permanent raises through a step increase.

In addition, five employees received performance awards after being disciplined for either underreporting their tax liabilities for multiples years, paying taxes late, or underreporting income.

“We take seriously our unique role as this nation's tax administrator, and we will strive to implement a policy that protects the integrity of the tax administration system and the reputation of the service,” Krieg wrote.

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