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Report Shows Corrupt IRS Employees Typically Keep Their Jobs. Some Even Get Promoted.

As tax collector, the IRS is never going to be voted America’s top government agency, but is should at least be considered trustworthy and competent. (Photo: iStockPhotos)

Editor’s note: Democrats’ so-called Inflation Reduction Act, passed by the Senate this weekend, would allow the IRS to hire 87,000 new agents.

There aren’t many gyms that employ obese personal trainers, or investment firms that retain bankrupt financial advisers. If they did, their business would certainly suffer.

But that’s precisely what the Internal Revenue Service did, according to a recent Treasury investigation. Between 2004 and 2013, the agency continued to employ, and even promote, nearly 1,000 employees who willfully lied on or failed to pay their own personal taxes.

Unfortunately, there’s no marketplace for tax collection and enforcement, so taxpayers can’t simply take their business elsewhere.

IRS employee tax compliance is an important component of the public’s trust in the IRS. That’s why there’s a special provision—Section 1203 of the IRS Restructuring and Reform Act of 1998—that specifies termination for any IRS employee found guilty of willful violations of tax law. The IRS commissioner, however, has the final say and can “mitigate” violations to a lesser penalty.

That’s exactly what has happened an overwhelming majority of the time. Of nearly 1,600 cases of willful noncompliance by IRS employees between 2004 and 2013, only 25% resulted in terminations—14% retired or resigned and 61% received mere reprimanding, suspension, or counseling.

These statistics are particularly troubling when considering that tax noncompliance is not just a workplace faux pas. These employees effectively stole from their employer, and tax evasion is a felony.

The topline statistics of the investigation are troubling enough on their own, but a more detailed look at 34 sample cases revealed some particularly egregious findings:

Not only were noncompliant employees not fired, but:

Well, could it be that these employees were just confused? This example seems to suggest otherwise::

And just when it seems the report can’t get any worse:

As tax collector, the IRS is never going to be voted America’s top government agency, but is should at least be considered trustworthy and competent.

When reports such as this surface, revealing the IRS’ failure to enforce tax compliance among its own employees, as well as recent findings of IRS employees targeting certain groups, it is hard to maintain trust and confidence in the IRS.

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