While the IRS requires its employees to file their federal tax returns on time and pay any federal tax debt, hundreds of the employees of IRS contractors are not held to that same standard, the Treasury Inspector General for Tax Administration has said.
It said it found weaknesses in the IRS’s existing practices that allowed contractor employees with federal tax debts and instances of non-filing to go undetected after the IRS initially granted staff-like access because the IRS does not continuously monitor contractor employee tax compliance in the same way it monitors IRS employee tax compliance.
Instead, the IRS reviews contractor tax compliance only once every five years or if the contract employee has longer than a two-year break in service, the IG said.
It said that as of June 2012, 691 of the 13,591 IRS contractor employees reviewed by TIGTA had $5.4 million in federal tax debt, although it noted that most of the contractor employees appeared to have been compliant when their initial staff-like access was granted.
However, at least 319 contractor employees had tax debt assessed after they were granted staff-like access and should not have had access to IRS facilities, systems and data, the IG said.The IRS agreed to further evaluate contractor employees identified as potentially noncompliant and promptly bringing those individuals into compliance or removing them from IRS contracts.
