Home » Audit Reveals IRS Employees Owe $50 Million in Unpaid Taxes

Audit Reveals IRS Employees Owe $50 Million in Unpaid Taxes

by Richard A Reagan

A recent audit by the Treasury Department’s Inspector General has uncovered that more than 3,800 Internal Revenue Service (IRS) employees and numerous contractors owe nearly $50 million in back taxes.

The revelation has sparked outrage, given the irony that the very agency responsible for collecting taxes has employees failing to comply with tax laws.

According to the audit, approximately 2,000 IRS employees have not even established a payment plan to address their tax debt.

Furthermore, over 50 employees have continued to work at the IRS for more than five years despite being delinquent.

The audit found that nearly 150,000 federal employees owe a collective $1.5 billion in unpaid taxes, highlighting a broader issue within the federal workforce.

Senator Joni Ernst (R-IA), who requested the audit, expressed her frustration over the situation, especially in light of the $80 billion allocated to the IRS under the Inflation Reduction Act to improve its audit capabilities.

“Surely the irony and hypocrisy can’t be missed here: taxpayers are being forced to pay billions more to the IRS to audit America while the agency won’t even collect the tens of millions of dollars in unpaid taxes owed by its employees,” Ernst remarked.

The Inspector General’s report also pointed out that IRS management has often been lenient with employees who have tax issues. Out of 1,068 cases reviewed, where disciplinary action was initiated, only 20 out of 70 employees with “substantiated willful” tax violations were removed.

This leniency is contrary to the law, which mandates the removal of employees found to have willfully committed acts of misconduct, including tax noncompliance.

However, the law also allows the IRS Commissioner discretion in these cases, which has often led to reduced penalties.

Moreover, the audit revealed that the IRS rehired over 500 individuals who had left the agency with known tax, performance, or misconduct issues. Among them, more than 100 had tax problems, and 15 had committed fraud or theft.

This practice persists despite a law prohibiting the IRS from rehiring individuals fired for misconduct or poor performance.

In response to the findings, Senator Ernst has called on IRS Commissioner Daniel Werfel to take action against the offending employees and, where appropriate, refer them for criminal prosecution.

Ernst is also introducing the “Audit the IRS Act,” which would require regular tax audits of IRS employees and the termination of those with seriously delinquent tax debts.

The situation raises significant concerns about the integrity of the IRS and its employees. The failure to hold IRS employees accountable undermines public trust in the tax system and the government’s commitment to fair and equal enforcement of the law.

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