The Internal Revenue Service has paid more than $2.8 million in bonuses to employees with recent disciplinary problems, including $1 million to workers who owed back taxes, a government investigator said yesterday. More than 2,800 workers got bonuses despite facing a disciplinary action in the previous year, including 1,150 who owed back taxes, says a report by J. Russell George, the Treasury inspector general for tax administration. The bonuses were awarded from October 2010 through December 2012. George's report said the bonus program doesn't violate federal regulations, but it's inconsistent with the IRS mission to enforce tax laws.
"These awards are designed to recognize and reward IRS employees for a job well done, and that is appropriate, because the IRS should encourage good performance," George said. "However, while not prohibited, providing awards to employees who have been disciplined for failing to pay federal taxes appears to create a conflict with the IRS' charge of ensuring the integrity of the system of tax administration." Other examples of misconduct by workers getting bonuses included misusing government credit cards for travel, drug use, violent threats, and fraudulently claiming unemployment benefits. The IRS said it has developed a new policy linking conduct and performance bonuses for executives and senior level employees. (Read more Internal Revenue Service stories.)