The watchdog agency that oversees the Internal Revenue Service has issued a report that examined compliance by employees and contractors for the agency. While the Treasury Inspector General for Tax Administration (TIGTA) report noted that more than 95 percent of the IRS’ workers were in full compliance with their personal taxes, 1,068 were disciplined for their noncompliance issues.
“Between October 1, 2021, and April 1, 2023, the IRS closed 1,175 cases with disciplinary actions, for 1,068 current employees, with confirmed tax noncompliance issues. During that same time period, 70 employees were identified with substantiated willful § 1203(b)(8) or (b)(9) violations and 20 were removed as a result. Although the law requires an employee who has either willfully not filed or willfully understated their taxes due to be removed, subject only to the IRS Commissioner’s mitigation, this disciplinary action is not always enforced. The Internal Revenue Manual does not describe the facts and circumstances considered by the § 1203 Review Board when making recommendations to the IRS Commissioner for mitigation or termination of IRS employees.”
In total, the IRS has more than 85,000 employees and more than 25,000 contractor workers. The majority of the noncompliant workers were contractors, according to the report.
TIGTA recommended that the IRS ensure that any unfiled tax returns have been secured or the instances of unpaid balances due for IRS and contractor employees identified in this report have been resolved and include in the Internal Revenue Manual the policies, procedures, and standards for the § 1203 Review Board.
Although the IRS disagreed with the first recommendation, it verified that the identified instances of tax noncompliance were being addressed according to IRS policies and procedures. To support consistency in the § 1203 Review Board review process, the IRS agreed to consolidate documentation of the § 1203 Review Board policies and procedures.
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