top of page

IRS Rehires Hundreds of Employees Fired for Fraud, Theft, Abusing Taxpayer Data

The Inspector General for Tax Administration has discovered that under Commissioner John Koskinen, the Internal Revenue Service re-hired 212 employees it had previously fired for offenses including tax evasion, theft, and abuse of taxpayer data.

The title of the report makes it clear that the IRS “continues to rehire former employees with conduct and performance issues.” The inspection was requested by a U.S. Senator, who is not named in the report, although Senator Richard Burr (R-NC) introduced legislation to block the agency from rehiring such employees shortly after the report was released.

“Whether it is the rehiring of previously terminated employees or continuing to give bonuses to poorly performing executives who can’t be fired – the delinquency at the IRS must end,” Burr declared. “It’s exactly actions like this that erode the public’s trust in their government. The American people are sick and tired of Washington at its worst. We have Americans paying the salaries of IRS workers who have repeatedly cheated the very government they took an oath to serve, and a Commissioner who won’t fire bad actors. The time to put a stop to these atrocious practices is now.”

As noted in a FedSmith report on Burr’s legislation, this is actually the second time he has attempted to block the IRS from restoring employees it fired for serious offenses. His effort last year was prompted by an Inspector General report very similar to this one. On that previous occasion, Burr noted that one of the employees re-hired by IRS literally had “DO NOT REHIRE” stamped on his or her personnel file.

The office of the Inspector General (TIGTA) is painfully aware that little improvement has occurred since last year’s report. In fact, the new publication notes with dismay that “nearly 300 of the 824 employees identified in the prior report were still employed by the IRS as of May 2016.”

Also, TIGTA notes that IRS is already required by federal law to consider prior conduct issues when rehiring terminated employees, under the IRS Consolidated Appropriations Act of 2016. Evidently that law is simply ignored, or rendered null and void by inept employment procedures.

The new report describes bureaucratic buffoonery that would be amusing, if the money and sensitive data of American taxpayers were not on the line. For example, IRS has an extensive “ALERTS” database filled with records of employee misconduct… but the people who actually make hiring decisions do not have access to it. A few dozen of the problematic rehired personnel were able to evade IRS employment screening by simply forgetting to mention they were previously terminated for cause by the agency.

Two employees who couldn’t make the grade as tax examining technicians were rehired for the same position less than six months later, on the grounds that the job requirements had changed.

Robert Wood at Forbes tallies up the other offenses: “Four of the more than 200 employees had been terminated or resigned for willful failure to properly file their Federal tax returns; four separated while under investigation for unauthorized accesses to taxpayer information; and 86 separated while under investigation for absences and leave, workplace disruption, or failure to follow instructions.”

One rehired employee had a legal record that included misdemeanor theft and felony possession of a forgery device. The Treasury Department normally frowns on that sort of thing.

The Heritage Foundation’s Daily Signal chalks up the report as more evidence that President Trump should fire IRS Commissioner John Koskinen, who has been strongly criticized by Republicans ever since the dawn of the Tea Party targeting scandal.

“The average American is not happy with the way the IRS behaves on a good day. It’s disappointing that they are rehiring people who were fired for very bad behavior,” Americans for Tax Reform President Grover Norquist told the Daily Signal. He complained that the difficulty of getting past civil service and union protections to fire bad federal employees “makes my head hurt.”

Norquist threw in a little free advice for President Trump, noting that if he doesn’t fire Koskinen soon, the IRS Commissioner might make some public statement about Trump’s taxes that would make it politically impossible for the president to fire him a repeat performance of the James Comey fiasco.

“I don’t know why President Trump hasn’t fired John Koskinen since there is more evidence the agency is mismanaged,” agreed Peter Flaherty of the National Legal and Policy Center. “Koskinen is a very typical Washington creature and is very at home in the swamp. It’s a puzzle to me why Trump hasn’t acted.”

Thus far the response from the IRS has consisted of boilerplate assurances that it will “take all steps allowable to prevent the rehiring of former employees with conduct and performance issues,” which would sound less risible if the same problem had not been identified in last year’s TIGTA report.

Internal Revenue Service spokespeople should at least do taxpayers the courtesy of pinky-swearing that they’ll do better this time.

John Koskinen

optimum 5-01 Transparent.png
bottom of page