The Internal Revenue Service (IRS) awarded more than a thousand workers with cash bonuses even though they hadn’t paid their taxes or underpaid them.

About $1.1 million was paid to more than 1,100 employees over a two-year period, according to a report by the Treasury Inspector General for Tax Administration.

A total of 2,800 employees who were disciplined for all types of misconduct collectively received $2.8 million in bonuses, extra paid time off or raises between October 2010 and December 2012, the inspector general found.

How did it happen that employees whose job is to collect taxes from other Americans didn’t pay their share of taxes and were rewarded in the process? Simple: the IRS doesn’t take into account if a worker has paid his or her taxes, or whether they have gotten into trouble, when administering bonuses and other awards.

By the way, the IRS Restructuring and Reform Act of 1998 mandates that any IRS worker caught not paying their taxes be fired.

The inspector general noted that rewarding tax delinquent employees “appears to be in conflict with the IRS’ charge of ensuring the integrity of the system of tax administration.”

In response to the report, the IRS has agreed to conduct a study on whether to modify their bonus program.

-Noel Brinkerhoff

To Learn More:

The IRS Gave $1 Million in Bonuses to Employees Who Didn’t Pay Their Taxes (by Eric Katz, Government Executive)

The Awards Program Complied with Federal Regulations, but Some Employees with Tax and Conduct Issues Received Awards (Treasury Inspector General for Tax Administration) (pdf)

IRS Executives Accused of Taking Improper Tax Deductions (by Noel Brinkerhoff, AllGov)

IRS Contractors Owe $589 Million in Back Taxes (by Matt Bewig, AllGov)