Tax Administration:

Allegations of IRS Employee Misconduct

GGD-99-82: Published: May 24, 1999. Publicly Released: Jun 18, 1999.

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Pursuant to a congressional request, GAO provided information on alleged misconduct by Internal Revenue Service (IRS) employees in their treatment of other IRS employees and taxpayers, focusing on: (1) the specific allegations made at the Senate Committee on Finance hearings; and (2) any underlying systemic or programmatic problems that need to be resolved to protect the rights of taxpayers and IRS employees.

GAO noted that: (1) available data showed significant differences between Senior Executive Service and line staff disciplinary cases in terms of dispositions and processing times; (2) IRS found that actions taken against lower-level employees more closely conformed to its established table of penalties than actions taken against higher-graded employees; (3) regarding the allegation that the Deputy Commissioner delayed action on senior manager misconduct cases until the managers were eligible to retire, GAO focused on actual retirements and did not reach general conclusions about eligibility to retire; (4) GAO found no cases in which an individual who was ineligible to retire when an allegation was filed, retired while the case was pending with the Deputy Commissioner; (5) GAO could not determine the extent of reprisal against whistleblowers because IRS did not track whistleblowing reprisal cases; (6) regarding allegations of IRS retaliation against taxpayers, GAO previously reported that IRS information systems were not designed to identify, address, and prevent such taxpayer abuse; (7) with respect to allegations of improper zeroing out or reductions of recommended taxes by IRS managers, GAO found no evidence to support the allegations in the eight specific cases referred to GAO by the IRS employees who testified at the hearings; (8) on the other hand, IRS did not systematically collect data on how much additional taxes recommended by auditors were zeroed out or reduced by IRS employees without a basis in law or IRS procedure; (9) IRS has acknowledged equal employment opportunity-related problems, including problems in hiring and promotion, in its Midwest District Office and has begun addressing them; and (10) IRS' lack of adequate information systems and documentation in the areas of employee discipline, retaliation against whistleblowers and taxpayers, and zeroing out of recommended taxes prevented GAO from doing a more comprehensive analysis of these issues.

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