IRS Employees Skirt Penalty Procedures
IRS employee abuses
“While the Trump administration, led by Acting Commissioner Bessent, is taking meaningful steps to enact change at the agency, the IRS continues to knowingly defy the rules of the road. Its current culture allows, even seems to encourage, this type of behavior, and it must come to an end.”
- Chuck Flint, AIA CEO
The Treasury Inspector General for Tax Administration (TIGTA) has exposed a shocking breakdown in the IRS’s compliance with the Restructuring and Reform Act of 1998 (RRA 98), specifically Section 1204(b)’s employee retention standard. That standard requires the IRS to “use the fair and equitable treatment of taxpayers by employees as one of the criteria for evaluating employee performance.”
Importantly, IRS employees who fail to meet this retention standard are ineligible for performance awards, within-grade increases, career ladder promotions, or satisfactory completion of a probationary period and may face removal from their position or from the agency altogether.
Yet TIGTA found that the IRS improperly concluded that the retention standard did not apply to certain employees based on their duties. Even worse, IRS internal guidance permits managers to rate employees as “Not Applicable,” even though governing regulations provide no such authorization.
As a result, TIGTA identified nearly 10,900 employees who were rated “Not Applicable,” along with 65 employees who received a “Not Met” rating for the retention standard. Of those 65 employees, at least 62 were not separated from service even though they received a “Not Met” retention rating and an overall performance rating of “Unacceptable.”
This blatant disregard for the law is yet another example of why the IRS cannot be trusted to police itself. While these actions are deeply troubling and highly damaging to the agency’s ability to treat taxpayers fairly, they are neither surprising nor new to the Alliance for IRS Accountability (AIA).
AIA calls on Acting IRS Commissioner Bessent and Treasury leadership to continue rooting out agenda-driven bureaucrats and dismantling a culture that enables open violations of clearly stated regulations.
Read the full report here.
If you, or someone you know, has experienced a specific IRS abuse and wish to flag the instance for potential inclusion in future Abuses of the Week, contact us with the details at: info@irsaccountability.org.