Few stories with so little meat have more life than the one about tax-delinquent tax employees.
Internal Revenue Service staffers have a near-perfect record on paying their federal taxes.
“The tax compliance rate of IRS employees is over 99 percent, by far the highest compliance rate of any government agency,” IRS Commissioner John A. Koskinen said recently. That compares with about 96 percent for feds generally and under92 percent for the public.
Yet, the few IRS laggards have been the target of House attempts to have them fired, and now a new report is generating headlines about tax cheats on staff.
“Report: 1,580 IRS workers evaded taxes over 10-year period,” is the headline on an Associated Press story carried by FoxNews.com and others.
To get a better idea of how little that means, readers need to go beyond the headline, which unfortunately many don’t, to the second paragraph of the story: “It’s a small percentage of the tax agency’s employees — about 160 workers a year out of a workforce of 85,000.”
This puts the story in a more accurate context. But that information from the Treasury Inspector General for Tax Administration (TIGTA) report can easily get lost in a continuing narrative of feds gone bad. In this case, TIGTA was just doing its duty, reporting the dry facts without hype. The inspector general noted that the IRS agreed with a recommendation to document reasons the commissioner did not fire all the tax delinquents eligible for termination.
“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,” the inspector general, J. Russell George, said in a statement. “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.”
Certainly, too many federal employees feed the negative narrative, sometimes in spectacular ways. But there’s also a counter-narrative on the spectacular accomplishments of the workforce.
That was on display at the Hart Senate Office Building Wednesday, where finalists for the Samuel J. Heyman Service to America Medals were honored at a luncheon over chicken Caesar salad and iced tea.
“Federal employees have made pioneering cancer discoveries, increased the safety of air travel, recovered millions of dollars siphoned from workers’ pensions, and reduced pollution in developing countries by introducing efficient cook stoves and cleaner fuel,” said Max Stier, president and chief executive of the Partnership for Public Service, which sponsors the awards.
It takes taxes to do those things, and there are a few in the IRS who don’t pay theirs when they should. The agency has the ability to fire them. TIGTA said 39 percent of the tax-delinquent employees were fired, while the others faced “lesser penalties such as suspensions, reprimands, or counseling.”
“Some employees had significant and sometimes repeated tax noncompliance issues, and a history of other conduct issues,” according to the report. “Moreover, management had concluded that the employees were not credible. Nonetheless, the proposed terminations were mitigated by the IRS Commissioner.”
For Rep. Jason Chaffetz (R-Utah), sponsor of the defeated bill to fire tax-delinquent feds, the TIGTA report “exposes a breakdown in protocol for how IRS management handles its own tax-delinquent employees. Those charged with oversight and enforcement of tax laws at the Internal Revenue Service must be in full compliance on their taxes. Anything less is absolutely unacceptable. Willful tax violators have no place working at the IRS. They should be fired.”
One problem with that: An employee fired for not paying taxes is then without income to pay the taxes. If employees continually refuse to pay, their wages can be garnisheed. Most employees make payment plans before it gets to that. Employees with a history of other egregious conduct should be fired.
Also, it’s worth noting that the number of closed “willful” employee noncompliance cases dropped from 214 in fiscal 2004 to 58 in fiscal 2013, according to the IRS. To the IRS, “willful tax noncompliance” includes those who are willing to pay but might not have the money when it’s due. Often, according to Colleen M. Kelley, president of the National Treasury Employees Union, late returns “are accurate and no taxes are even owed.”
On an unrelated note, as part of this Public Service Recognition Week, Koskinen posted a number of comments from taxpayers on an internal Web site. One called in from abroad with a tax question and reached Madeline Welsh, a tax specialist in Pittsburgh.
“ ‘When we hung up, I wanted to give the IRS a massive hug,’ ” she told the commissioner. “ ‘Now how often do you hear people say that?’ ”
Previous columns by Joe Davidson are available at wapo.st/JoeDavidson.