Internal Revenue Service tax filing compliance will be checked by the Treasury Department’s watchdog.
Senator Joni Ernst (R-IA) requested the investigation after hearing that Democrats were planning to increase the Internal Revenue Service’s workforce by 87,000. Hundreds of IRS workers may not have paid their own taxes, according to previous findings by the Treasury Inspector General for Tax Administration. Some of these workers cited reasons like not knowing how to file their taxes as an excuse. Some of those who had been sacked for “willful failure to properly file their Federal tax returns” were later rehired by the agency.
This is rich, the IRS willfully not paying their own taxes. Repeat offenders. They won’t be fired I’m sure, or penalized. Tax evasion.
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This is what a rogue government is, with no checks and balances.
— Freedom Justice Liberty (@ItIsAboutPeople) September 14, 2022
“Ironically, hundreds of employees at the IRS itself may have willfully failed to pay their taxes. More than 300 of these were repeat offenders, yet the tax agency did little to discipline the tax offenders on its payroll,” Ernst stated on Wednesday. “Before Biden’s army of auditors starts harassing innocent taxpayers, let’s first make sure the tax collectors have paid their own taxes.”
This summer, IRS Commissioner David Ernst wrote to Inspector General J. Russell George about findings from his office that 1,250 IRS employees had not funded their tax bills in full or on time in 2019, with hundreds of them being willfully offending or repeat offenders, and that the tax collection agency had “done little to discipline these tax cheats on its own payroll.”
Conservatives and even the neutral Congressional Budget Office foresee more rigorous audits of middle class taxpayers in light of the Democrats’ and President Biden’s rushed legislation to double the size of the IRS personnel.
Ernst said that the IRS shouldn’t target “innocent, hard working Americans” with “unfair and costly audits” while “ignoring tax cheats on its own payroll.”
In response, the IG said it would conduct an audit of the division at her request to determine how many workers are not “fully compliant on their Federal tax obligations” and how many current employees were rehired after being terminated or forced to retire for reasons related to their performance, including their failure to pay their taxes in full.
On Tuesday, President Biden welcomed the passing of the Democratic Party’s Inflation Reduction Act, which included a plan to significantly expand the Internal Revenue Service. Ernst said she doubts the Biden administration’s claim that newly appointed auditors will target the wealthy and large firms.
“The chances of that are very slim,” Ernst said. “Eighty-seven thousand agents and Joe Biden said no one making under $400,000 would be audited, but we know that’s not true. They will go after the low-hanging fruit, and that’s hard-working Americans.”
According to the latest IG report (2019), IRS employees who “willfully” refuse to submit taxes or who underreport their income are subject to termination. Out of 1,250 cases in 2017, the IRS found only 90 were “willful,” saying thar the IRS agents “should have known” how to file taxes properly. However, this was after a bureaucratic process filled with union protections.
In 2017, 15 of the offenders had been detected for tax misconduct before, but they had not been dismissed before because the IRS had determined that their misconduct was not “willful.” The report states that some workers “forgot” to disclose money earned on Form 1099, while another four “cited an inability to properly use e-file software, such as TurboTax.”
According to the audit, the IRS’s Labor Relations division made little effort to fire underperforming workers. For instance, it omitted information that would have been used to decide whether or not the employees should be fired because of previous wrongdoing.
According to a 2017 investigation by the IG, the IRS, which uses database cross-referencing to discover regular people cheating on their taxes, neglected to incorporate a database revealing HR difficulties of former employees. As a result, in 2015 and early 2016, nearly two hundred former workers were rehired despite having a history of wrongdoing that included failing to pay taxes or falsifying government records. Several of these workers “had positions with access to sensitive taxpayer information,” the report stated.
“Some employees repeated past violations upon being rehired,” it said.