Manchin to IRS: Take back bonuses from tax delinquents

Sen. Joe Manchin, a centrist Democrat from West Virginia, is demanding that Internal Revenue Service Commissioner John Koskinen rescind bonuses to IRS employees who have failed to pay their taxes.

Manchin told Koskinen in a sternly worded letter that giving hundreds of thousands of dollars in awards and bonuses to employees with serious tax issues is “completely unacceptable.”

{mosads}”How can we expect the American people — many of whom are struggling to make ends meet — to trust their government when they learn that the very agency charged with collecting their tax dollars is rewarding employees who haven’t paid theirs?” Manchin wrote in a letter Wednesday.

An audit by the Treasury Department’s inspector general for tax administration found that the IRS gave $1.07 million in bonuses to 1,146 employees with tax problems between October 2010 and December 2012. Those staffers also received 10,500 in extra time off from the agency.

“No federal agency should reward tax-delinquent employees with taxpayer-funded bonuses and rewards, least of all the IRS,” Manchin wrote.

Manchin said the IRS should implement the inspector general’s recommendation to award future bonuses and performance awards only to IRS employees who are fully compliant with federal tax law, and rescind awards to those with “substantiated tax compliance problems.”

He acknowledged the bonuses were handed out before Koskinen took over as head of the agency, shortly before Christmas of 2013, but urged him to take “swift action.”

Rep. Sam Johnson (R-Texas) on Wednesday announced plans to introduce legislation that would prevent IRS employees who have failed to pay taxes from receiving bonuses.

“The IRS is essentially telling its employees: break the law and we will reward you. That’s just wrong!” Johnson said.

The inspector general found that, in total, IRS employees with conduct issues resulting in disciplinary action such as written reprimands, suspensions and removal received $2.8 million in monetary awards between Oct. 1, 2010, and Dec. 31, 2012. The employees ranged from general schedule employees to managers.

— Bernie Becker and Cristina Marcos contributed.