The New Bill That Looks to Stop Bonuses for IRS Tax Cheats

A Republican and Democratic senator have proposed legislation aimed at stopping the practice of handing out performance bonuses to government workers with conduct problems.

The bill is a reaction to last week’s government report that said 1,146 employees at the Internal Revenue Service received more than $1 million in bonuses from 2010 to 2012 even though they had failed to pay their taxes on time. That report found that more than 2,800 IRS workers received a bonus even though they had been subject to disciplinary action by the IRS.

U.S. Sen. Kelly Ayotte (R-NH) and others are not happy about the IRS decision to award bonuses to workers who have not paid their taxes. (Mark Wilson/Getty Images)

The IRS also awarded thousands of hours in time off to these same workers.

The Stop Wasteful Federal Bonuses Act, from Sens. Kelly Ayotte (R-N.H.) and Claire McCaskill (D-Mo.), would prohibit bonus awards from going to any government worker whose conduct violates agency policy in a way that could lead to their suspension or firing. It would prohibit bonuses to anyone who has violated a law in a way that could lead to their imprisonment, and it would let agencies take back bonuses to workers involved in conduct violations.

Both senators cast the bill as a common-sense reform that is needed to help ensure taxpayers that their money is not being wasted in Washington DC.

"Federal employees who have disciplinary problems or who haven't paid their taxes shouldn't be getting bonuses,” Ayotte said in a statement announcing the bill. “Taxpayers in New Hampshire and across the nation were alarmed by recent reports of IRS employees being awarded bonuses that they shouldn't have received. This bipartisan legislation takes common sense steps to prevent workers with serious conduct infractions from receiving bonus pay.”

"The notion that taxpayer dollars would be used to pay cash bonuses to employees who've engaged in conduct that could get them fired or sent to jail is outrageous – and our bill would put an end to it," said McCaskill in the same statement. "If we're going to restore Americans' confidence that their federal government is spending money wisely, then this is a commonsense step in that direction."

The report on IRS bonuses from the Treasury Department’s Inspector General has led to criticism from other members. Sen. Joe Manchin (D-W.Va.) has demanded that the IRS take back the controversial bonus awards, and Rep. Sam Johnson (R-Texas) has said he would propose a bill similar to the one offered by Ayotte and McCaskill.