IRS employees will still be eligible to get bonuses next year despite owing taxes and making "unintentional mistakes," the agency confirmed this week, according to The Washington Times.
A round of bonuses that will be paid out early next year was announced by IRS Commissioner John Koskinen in an email to employees on Monday. Although employees who willfully skipped out on their taxes would be kept away from getting performance awards, the tax agency would be more forgiving of the "long-suffering staffers" who made honest mistakes but have still managed to keep IRS humming, the statement said.
"It's important to remember that not everyone at the IRS is a tax expert - some work in non-tax specific areas in occupations ranging from IT programmers, administrative professionals to human capital specialists," the IRS told The Hill in a statement this week. "Where employees have been found to have made unintentional tax mistakes, they would generally still be eligible to receive performance awards they have earned."
"I believe that rewarding our high-performing employees is a vital investment for our nation's tax system," Koskinen said.
In April, it was reported that the agency paid out more than $1 million in bonuses earlier this decade to 1,146 employees who investigators said had "tax compliance problems," according to a Treasury Department inspector general report. Those employees were also awarded more than 10,000 hours of paid vacation, valued at $256,000.
Then from October 2010 to December 2012, the agency also gave $2.8 million in bonuses to employees with conduct issues, according to The Hill.
"My view is that employees understand they work for the IRS and are held to a higher standard," Koskinen said in April. "People ought to be comfortable that if you work for the IRS and I'm chasing you for your taxes, I should pay mine."
The move was slammed by top Republicans and congressional critics, who stated that awarding bonuses would send the wrong message, especially at a time when the agency is embroiled in a host of scandals, including the aftermath of the agency's singling out of Tea Party groups.
"It's no wonder the American people find it hard to believe the IRS needs more money when the agency fails to collect back taxes from their own employees and instead rewards them with bonuses," said Sen. Orrin G. Hatch, the Utah Republican who is poised to become chairman of the Senate Committee on Finance next year. "American families have been doing more with less for far too long now, and it is time the IRS [does] the same."
Under an agreement worked out between The Union of Federal Employees (NTEU) and the IRS, employees who violated an agency code of conduct would not be eligible for bonuses, according to The Hill. "Those violations include willfully evading taxes, threatening an audit for your own personal gain, assaulting a taxpayer and intentionally releasing taxpayer information - 'serious misconduct,'" Koskinen told employees this week.
"This is a common-sense approach that underscores the seriousness of these provisions. Employees violating these basic standards should not be eligible for financial awards," Koskinen added.
In its statement explaining the decision, the IRS said that the agency holds its employees to the highest possible standards on tax compliance, and that more than 99 percent of staffers are up to date on their taxes, The Washington Times reported.
"IRS leadership determined that in cases of willful tax non-compliance, performance awards will not be paid to otherwise eligible employees," the agency said.
"However, the law specifically excludes unintentional tax errors made due to a 'reasonable cause,' not to penalize employees for legitimate, unintended errors. The IRS monitors 100 percent of IRS employee tax accounts to identify acts of potential non-compliance and works with employees to ensure prompt payment."
Colleen Kelley, NTEU's president, said in her own statement that "IRS employees face discipline, including termination, for other tax compliance and conduct issues."
"Unlike the rest of the federal workforce, where penalties for conduct issues do not include withholding performance awards, this IRS-NTEU agreement links conduct to performance awards," Kelley added.
Meanwhile, NTEU did not respond to a request for comment Wednesday on the bonuses.
