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Double Standards at the IRS

The IRS is cracking down on more tax cheats this year but they don't enforce this standard on thousands of their own employees.

While 96% of IRS employees fulfilled their tax obligations last year, a significant share were delinquent, owing almost $50 million in federal taxes, a new oversight report found. This certainly raises questions when we are constantly hearing about the IRS efforts to enforce tax compliance and restore "fairness" in the nation’s tax system by starting with non-compliant taxpayers.

The IRS’s inability to get its employees to abide by rules they enforce on millions of taxpayers has also faced some criticism from Congress.

“Surely the irony and hypocrisy can’t be missed here: taxpayers are being forced to pay billions more to the IRS to audit America while the agency won’t even collect the tens of millions of dollars in unpaid taxes owed by its employees,” said Sen. Joni Ernst (R-IA), who commissioned the audit. “Taxpayers will never trust the IRS when the agency’s own auditors can’t even pass a tax audit.”

You would expect that IRS employees would be the first to file their federal tax returns on time, but data shows that roughly 5,800 IRS and contractor employees were delinquent on their taxes last year. That’s not the worst part. 

In total, IRS and contractor employees who didn’t have a repayment plan owed the federal government approximately $29 million as of May of last year. Meanwhile, those on installment plans owed about $17 million to the IRS. This was the case even though the agency offers several payment plans if you are unable to pay the full amount of your federal taxes by the tax deadline.  

So why were these employees behind on their taxes? The IRS guidelines clearly require that all federal employees comply with federal tax obligations to continue working at the agency. 

“Contractor employees must be Federal tax compliant by filing and paying all taxes when due,” the inspector general wrote in the report. “Contractor employees, just like any other taxpayers who are unable to pay what they owe, may enter an installment plan.”  

While Congress requires the removal of IRS employees who willfully fail to file their federal tax return on time or understate their federal tax liability, the IRS Commissioner has sole authority to “mitigate the mandatory removal of employees,” the report said.  He certainly must be busy doing that!

The proof is that while thousands of IRS employees and contractors were behind on their taxes  - only 70 cases were referred to the review board due to substantiated willful violations of tax noncompliance. Of these, only 20 employees were laid off.  Hypocrisy from government officials seems to be in full swing.