IRS promoted employees who cheated on their taxes, audit finds

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IRS promoted employees who cheated on their taxes, audit finds

IRS Commissioner John Koskinen, who, along with a review board must approve the decision to keep any employees deemed to have intentionally cheated on their taxes, has insisted things at his agency have improved over the last two years. (Associated ... more >

 

 

 

By Stephen Dinan - The Washington Times - Wednesday, May 6, 2015

The IRS refused to fire most of its own employees found to be cheating on their taxes — and in some cases even quickly turned around and promoted them within the year, according to an audit released Wednesday.

In about 60 percent of cases of “willful violations,” IRS managers found mitigating circumstances and refused to fire the employees, even though the law calls for that penalty. In some of those cases, the managers didn’t even document why they had overridden the penalty, said Treasury Inspector General for Tax Administration J. Russell George.

“Given its critical role in federal tax administration, the IRS must ensure that its employees comply with the tax law in order to maintain the public’s confidence,” Mr. George said. “Willful violation of the law by IRS employees should not be taken lightly, and the IRS commissioner should fully document decisions made to retain employees whom management has proposed be terminated.”

From 2004 to 2013, the IRS identified nearly 130,000 suspected cases of tax violations by its own employees and concluded about 10 percent of those were actual violations. Mr. George said the agency did a good job of spotting those issues.

Of those 13,000 cases, 1,580 were deemed to be intentional cheaters, and they were sent to managers for discipline. But in 60 percent of the cases, the managers refused to fire the employees.

Among the abuses were employees who repeatedly failed to file their returns on time, those who intentionally inflated their expenses and those who claimed the stimulus homebuyer’s tax credit without buying a home.

 

The IRS said its employees have a compliance rate of higher than 99 percent, which is much higher than other employers and is tops among all major federal agencies.

“Over ten years, TIGTA found an average of a little more than 150 IRS employees a year committed a willful tax violation. Of the total cases, 620 — or nearly 40 percent — resulted in the employee leaving their position because they were terminated, resigned or retired. Others faced strong disciplinary actions that included terminations, suspensions and reprimands,” the agency said.

The IRS also said it has taken steps to cancel bonuses that would otherwise have been paid to the tax cheats.

“Nonetheless, the IRS agrees that we can improve this process. The changes will include a more proactive approach to ensure timeliness and consistency and provide more transparency in the mitigation process while preserving the commissioner’s authority provided by federal law,” the agency said in its statement.

Of the 1,580 employees deemed to have intentionally cheated on their taxes, 108 of them received no punishment at all. The others were at least admonished, while 25 percent were fired, and 14 percent were allowed to resign or retire instead of being fired.

The vast majority of substantiated reports involved “nonwillful” violations. Of those, just 238, or about 1 percent, were deemed serious enough to be fired. Another 1 percent were allowed to retire or resign, 47 percent were admonished, 26 percent were sent to counseling, and 14 percent were closed without any punishment.

More than 2,000 employees had multiple red flags during the decade, the inspector general said. Investigators pulled a sample of 15 cases where an employee had repeated intentional violations and found that even there, the majority were allowed to remain on the job.

The inspector general took a sampling of 364 cases of intentional cheaters and found that 108 of them were not only not fired, but were given raises or promotions within a year of being found to be cheating.

The report comes a month after the inspector general revealed the IRS rehired hundreds of employees who had been let go after performance or misconduct problems.

 

Rep. Peter J. Roskam, chairman of the House Ways and Means oversight subcommittee, said the new report was the latest black mark for the agency, and said it undercut the IRS’s complaints about budget cuts hurting its ability to conduct audits of the public.

“The IRS owes the American people an explanation for this display of bureaucratic incompetence,” the Illinois Republican said. “To argue that budget cuts provide ‘a tax cut for tax cheats’ while harboring employees who violate the laws they are supposed to enforce, quite frankly, defies logic.”

IRS Commissioner John Koskinen, who, along with a review board must approve the decision to keep any employees deemed to have intentionally cheated on their taxes, has insisted things at his agency have improved over the last two years, which is when another report from Mr. George exposed that the IRS had singled out tea party groups for special scrutiny in their tax-exempt applications.

Mr. Koskinen has argued that budget cuts have eviscerated morale at the IRS, and he has pleaded with Congress to give him more money to hire staff. He also defended doling out bonuses to employees.

“They are not bonuses, they are performance awards. Over 40, 45 percent of the employees don’t get them. You only get them if you perform,” he said.

But he said he’s taken steps to try to make sure tax cheats don’t get awards.

“Even though we have over 99 percent compliance, I thought it was an important point,” he said.

Read more: http://www.washingtontimes.com/news/2015/may/6/irs-gave-promotions-tax-cheaters-audit/#ixzz3ZS2Kzc7a 
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IRS wasted $5.6B on bogus Obama stimulus tax credits, audit finds

The Internal Revenue Service headquarters building is seen in Washington on April 13, 2014. (Associated Press) **FILE** more >

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The tax break at issue began in 2007, but was converted into part of President Obama’s 2009 stimulus package and renamed the American Opportunity Tax Credit. It was supposed to expire in 2010, but Mr. Obama and Congress extended it through 2017.

The credits are designed to offset the costs of college, and are at least partially refundable, meaning even Americans who don’t owe taxes can file and get money back from the government.

“Unfortunately, as today’s report shows, the IRS has only succeeded in stimulating waste,” said Sen. Orrin G. Hatch, chairman of the Senate Finance Committee.

Of the 3.8 million students for whom the credit was claimed, about 2.1 million never filed the tuition statement form required to prove they qualified, and 1.6 million claimed to be attending schools that shouldn’t have qualified for the credit. More than 750,000 of the students broke both rules.

More than 400,000 tax returns claimed the credit despite the student attending school less than half-time, and hundreds of thousands of others had claimed more than four years of the credit — both conditions that should have disqualified them.

Investigators presented their findings to the IRS, which went back and conducted examinations of fewer than 2,000 students. Those that they have finished auditing, though, have generally been found to have been making bogus claims.

IRS officials said part of the blame for the potential fraud lies with the schedule. Schools aren’t required to report on students’ attendance until March 31, which comes well into the tax season, when many students have already filed their returns and claimed refunds.

Debra Holland, the IRS wage and investment division commissioner, said they have improved their checks already, spotting 1.8 million questionable returns. Of those, however, just 9,600 were put through an exam to see whether they were bilking the government.

Ms. Holland blamed a lack of money for her agency’s inability to do more, and said they needed to limit their efforts to tax returns that had the highest risk of errors and the best chance of reclaiming money.

The IRS has already moved to add more checks to its system by looking to see who’s claimed the tax credit for more than four nonconsecutive years.

In a statement Tuesday, the IRS said Congress could help the agency out by granting it the power to automatically reject payments to students who claim more than four years of the tax credit. The agency also said Congress could approve new tools to access other government databases to check students’ eligibility for the tax credits, and could speed up the time frame for filing the tuition forms that the inspector general said were missing in most of the cases it identified.

“Funding limitations have severely hampered our efforts in this and other compliance areas. Since 2010 the IRS budget has been reduced by nearly $1.2 billion, and we expect to have 16,000 fewer employees by the end of this fiscal year. We simply do not have enough resources to audit every questionable credit,” the agency said.

The agency also said it believed the estimate of $5.6 billion was “overstated,” though the IRS acknowledged that it should try to do more to cut down on bad payments.

Read more: http://www.washingtontimes.com/news/2015/may/5/irs-wasted-56b-bogus-obama-stimulus-tax-credits/#ixzz3ZS5RApow 
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[italiancat]

And we are surprised...........because!!!!

[yota691]

Give it some time..somebody will speak up to supports this an show justification...