Senate Finance Republicans Want IRS Bonuses Rescinded

The letter was signed by Finance Committee Ranking Member Senator Orrin Hatch (R-Utah) and Senators Chuck Grassley (R-Iowa), Mike Crapo (R-Idaho), John Cornyn (R-Texas), John Thune (R-S.D.), Richard Burr (R-N.C.), Johnny Isakson (R-Ga.), Rob Portman (R-Ohio) and Patrick Toomey (R-Pa.).

At issue is the report from the Treasury Department's Inspector General for Tax Administration on Internal Revenue Service bonuses awarded to personnel who have violated the tax laws or who have been subject to serious infractions of employee policy.

Last week, Roberts and Enzi introduced a bill to prohibit the Internal Revenue Service (IRS) from providing performance awards to employees who owe outstanding federal tax debt or who have violated U.S. tax law. The bill has 9 cosponsors.

The text of the letter, sent late yesterday, is below:

We write regarding the Treasury Inspector General for Tax Administration's (TIGTA) report to the public on April 22, 2014, citing the several thousand IRS employees with either substantial conduct or tax compliance problems who received monetary or time-off awards. In several cases, personnel were given awards even though they had willfully understated tax liabilities, made late payments of tax liabilities or had under-reported income. Any of these violations would have placed average taxpayers under IRS scrutiny and certainly not have ended with them receiving an award.

The public disclosure of these awards at a time when the IRS is under scrutiny for its actions concerning the political activity of conservative social welfare organizations and when its performance of basic taxpayer service functions have materially worsened calls into question the agency's commitment to the fair enforcement of our tax laws.

In recent testimony to the House Appropriations Committee, you testified that "the IRS is committed to carrying out its core responsibilities and working to preserve the public's faith in the essential fairness and integrity of our tax system." The distribution of monetary and time off rewards to personnel who have substantively violated the federal tax laws is entirely inconsistent with this statement and particularly galling given other recent actions by your agency. In the same testimony, you noted

In your April 7, 2014, testimony, you also estimated that every dollar "invested" in the IRS budget produces $4 in enforcement revenue. Given this calculus, the money spent on the bonuses identified in the TIGTA report would fully fund a number of the enforcement programs requested for FY 2015. The payment of awards to IRS employees who disregard the law creates an obvious conflict of interest with the agency's mandate to ensure integrity of the tax system and is very troubling at a time when the agency asks for additional appropriations for enforcement activities. The IRS's decision to issue bonuses to personnel who have violated the tax laws is foolhardy and wasteful in such a challenging fiscal climate.

We would appreciate an explanation of how the agency's award system accounts for improper conduct by IRS employees. Further, we believe bonus payments to employees who have violated federal tax laws are improper and should, to the extent consistent with the law, be immediately rescinded.

We would also like an explanation of how you plan to expeditiously adopt measures and standards to prevent future awards from being given to employees with conduct and performance issues. Specifically, we respectfully request that you provide information (including a time frame) on the following:

The American public expects and deserves something better from our highest tax administration agency; namely actions displaying a commitment to a higher standard that provides an example to the citizens the agency serves.

Thank you for your attention to this request.