Wednesday, April 23, 2014

The IRS and Bonuses for Cheaters

A disappointing IRS story was released yesterday.

Apparently $2.8 million in extra compensation and many hours of time off were given over the last two years to IRS employees who themselves were "in trouble over tax-related issues."

Specifically, 1,100 IRS employees who received $1 million in bonuses willfully understated their personal tax liabilities, made late payments and under-reported their incomes.

This information was uncovered in an audit by the Treasury Inspector General for Tax Administration.  

According to CNN Money, the audit report says this "appears to create a conflict with the IRS's charge of ensuring the integrity of the system of tax administration."

Well, duh.

I have a better idea.  When IRS employees cheat on their taxes, don't give them bonuses.

Fire them.  

Maybe this sounds harsh, but think about it:  If you have a criminal record, could you reasonably expect to get a job at the police department?  What's the difference here?  Don't we want an agency with as much power as the IRS to maintain an internal culture of respect for adhering to the tax code?

Apparently IRS executives who don't pay all their taxes have not been eligible for bonuses for several years now (the poor things).  But there is no federal regulation against giving bonuses to lower-level tax cheats.

How stupid is that?  If you were an IRS office manager, would you really need a federal regulation to help you decide against keeping a tax-cheating auditor in your office? Wouldn't you just tell the guy to clear out his desk and dare him to sue you for wrongful termination?   

Imagine the fun a jury of taxpayers would have with a case like that.

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