IRS Bonuses and Employee Misconduct

"Should IRS employees with conduct demerits or tax compliance problems get bonuses?" asks tax attorney Robert Wood. This is an issue that has gotten much publicity over the last year. Political targeting, Lois Lerner, and the scandal over the 501(c)(4) organizations have all been widely reported. Wood thinks that the extensive press coverage of these issues sends the wrong message and increases the distrust Americans have for the IRS.

Rob Wood

Rob Wood

As to the awarding of bonuses and the misconduct, Wood explained that IRS employees are largely unionized, a factor that necessarily imposes limits on what management can do about employee discipline. Wood feels the union situation should probably change. The issues are discussed in his article “IRS Employees Gone Wild? Bonus Outrage Continues” in Forbes magazine.

Most IRS employees, in Wood’s experience, are competent. He thinks that it is important to distinguish between a situation where an employee owes back taxes and a situation where an employee oversteps authority and does bad things to taxpayers. On the other hand, the “Caesar’s wife” argument would be that, where an agency is trying to encourage compliance with the U.S. tax laws, all of its employees should be in compliance.

For more information on the subject, please refer to Mr. Wood’s article in Forbes. Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network.  The Legal Broadcast Network is a featured network of the Sequence Media Group.