A top Senate Republican is fuming over an announcement by Internal Revenue Service Commissioner John Koskinen that he plans to hand out bonuses to union and non-union members who work for the agency, potentially including those who owe back taxes.
“It’s no wonder the American people find it hard to believe the IRS needs more money when the agency fails to collect back taxes from their own employees and instead rewards them with bonuses,” Sen. Orrin Hatch, R-Utah, who is likely to become chairman of the Senate Finance Committee in January. “American families have been doing more with less for far too long now, and it is time the IRS do the same.”
Hatch has publicized a letter sent this week from Koskinen to IRS employees, announcing the agency will hand out “performance awards,” worth one percent of employee base salary.
“While this is below the 1.75 percent from FY 2012 and previous years,” Koskinen wrote to employees in an agency memo, “it’s significant that we could work out an agreement … to recognize our hardworking and high-performing employees.”
In the memo, Koskinen tells employees the smaller bonuses “reflect the severity of our ongoing budget situation, which is down $850 million or 7 percent below our FY 2010 level.”
Koskinen highlights a new policy for bonus eligibility “designed to protect the integrity” of the program. It rules out bonuses for those who commit “willful failure to file any tax required under the Internal Revenue Service Code of 1986 on or before the required date (including extensions), unless the failure is due to reasonable cause and not willful neglect.”
The new rule followed an internal report issued earlier this year that found the IRS had paid $1 million in bonuses to agency employees who owed back taxes.
But Hatch aides say the new rule referenced by Koskinen is silent on those who have not actually paid their taxes after filing with the IRS.
“Meaning, an employee can file a tax return, not pay, and get an IRS bonus,” an aide said. “A lot of people file without fully paying. They are eligible for bonuses.”
In a statement provided to the Examiner, the IRS said the agency would withhold bonuses in cases where employees showed “willful tax noncompliance,” but not for “legitimate, unintended errors.”
The IRS monitors every tax account of its employees, the statement said, and works to ensure employees pay up when they owe taxes.
“It’s important to remember that not everyone at the IRS is a tax expert,” the statement said. “Some work in non-tax specific areas in occupations ranging from IT programmers, administrative professionals to human capital specialists. Where employees have been found to have made unintentional tax mistakes, they would generally still be eligible to receive performance awards they have earned.”
