The Department of Treasury’s internal watchdog will audit the Internal Revenue Service to ensure that its own agents are paying their taxes.
The audit was initiated at the request of Sen. Joni Ernst (R-IA) following a Democrat plan for 87,000 new employees at the tax enforcement agency. The Treasury Inspector General for Tax Administration has previously found that hundreds of IRS employees may have failed to pay their own taxes, with some offering excuses such as they didn’t know how. Some were even re-hired for a second stint at the agency after being fired for “willful failure to properly file their Federal tax returns.”
“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 said Wednesday. “Before Biden’s army of auditors starts harassing innocent taxpayers, let’s first make sure the tax collectors have paid their own taxes.”
Ernst wrote to Inspector General J. Russell George this summer voting that his office found in 2019 that 1,250 IRS employees had not paid their tax bills in full or on time, including hundreds of whom were willfully delinquent or repeat offenders, and that the tax collecting agency had “done little to discipline these tax cheats on its own payroll.”
With Democrats and President Biden ramming through legislation to double the size of the IRS workforce, conservatives and even the nonpartisan Congressional Budget Office expects more aggressive audits of middle class taxpayers.
“Innocent, hardworking Americans should not be subjected to unfair and costly IRS audits when the agency is ignoring tax cheats on its own payroll,” Ernst wrote.
The IG responded that at her request, it would audit the department to find out how many employees are not “fully compliant on their Federal tax obligations” and the number of current workers who were brought back after being fired or retiring following performance issues, including failure to fully pay their taxes.
The plan to dramatically expand the Internal Revenue Service was part of Democrats’ Inflation Reduction Act, whose recent passage Biden celebrated Tuesday. The Biden administration said new auditors would focus on the wealthy and corporations, but Ernst told The Daily Wire she is skeptical.
“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.”
The 2019 IG report said that IRS agents are required to be removed from their jobs for “willfully” failing to file or understating their taxes. But following a bureaucratic process filled with union protections, out of 1,250 cases in 2017, the IRS found that only 90 were “willful,” meaning the IRS agents “should have known” how to file their taxes properly.
For 15 of the offenders in 2017, it was not their first time being caught for tax misconduct, but they were not fired previously because the IRS said it wasn’t “willful.” Some employees said that they “forgot” to claim Form 1099 income, and “four employees cited an inability to properly use e-file software, such as TurboTax,” the report said.
The IRS’ Labor Relations department did not seem to try very hard to get rid of bad employees, the report said. For example, it failed to include evidence of past misconduct in paperwork that would determine whether the employees would be fired or not.
In a 2017 report, the IG found that the IRS–which cross-references databases to catch ordinary Americans underreporting their income–did not bother to integrate a database showing HR issues of past employees. As a result, more than 200 employees who were fired for past misconduct — including failing to pay their taxes or falsification of government records — were hired a second time in 2015 or early 2016. “Some of these employees held positions with access to sensitive taxpayer information,” the report said.
“Some employees repeated past violations upon being rehired,” it said.