The IRS may not disclose to agencies outside the Treasury Department the tax delinquency of their employees. Image: AevanStock/Shutterstock.com
By: FEDweek StaffThe rate of tax delinquency by federal employees rose from 4 percent to 5 percent over fiscal 2015-2021, according to an audit by the inspector general’s office at the IRS.
In that time the number of federal employees, including the Postal Service, rose by 6 percent while the number of delinquencies and the amount owed each rose by about a third, to 149,000 and $1.5 billion.
Additionally, during that period some 42,000 federal employees failed to file a tax return in multiple years, with employees of the Postal Service, VA, Army and Navy accounting for half the total. About a fifth of them had annual salaries above $100,000, it added.
“Repeatedly and intentionally not filing a tax return when required to do so is a brazen form of noncompliance, particularly when it is done by federal employees,” it said. “As the agency primarily responsible for administering federal tax law, the IRS must ensure that federal employees comply with the tax law in order to maintain the public’s confidence.”
It said that while the IRS has a program called the Federal Employee/Retiree Delinquency Initiative, “The time the IRS dedicates to federal employee nonfilers is minimal […] Inadequate resources, challenges related to the Coronavirus 2019 Disease pandemic, and management priorities led to backlogs and reduced workdays” spent on those cases.
Willful failure to file a return, supply information or pay tax can result in both criminal and civil charges, it said. However, over that period civil penalties based on indicators of fraud were filed against only 10 federal employees. (The report redacted data on criminal investigations.)
It added that a law holds IRS employees to a high standard for tax compliance and it can enforce requirements against its own employees. One result is that the rate at the IRS is notably low, at 1.4 percent. However, the IRS may not disclose to agencies outside the Treasury Department the tax delinquency of their employees, the report said, recommending that a change in law to allow that be considered.
It said that IRS agreed with other recommendations, including better training of staff on the federal employee delinquency initiative and to increase the focus on potentially building both civil and criminal cases of fraud against repeat nonfilers.
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