Written by Nathaniel Davis.

A recent audit from the Treasury Department’s inspector general has unveiled a rather troubling scenario: IRS employees and contractors collectively owe $50 million in unpaid taxes. This news is particularly ironic given that these are the very individuals tasked with monitoring the financial activities of American taxpayers.

According to The Daily Wire, among the 3,800 IRS employees who have fallen behind on their taxes, approximately 2,000 haven’t even bothered to set up a payment plan. Even more astonishing, over 50 employees have managed to avoid resolving their tax debts for five years or more.

The audit also revealed that nearly 150,000 federal employees in total are in tax arrears, collectively owing a staggering $1.5 billion to the government. This discovery raises serious questions about the effectiveness and integrity of those charged with ensuring tax compliance.

The Irony of the IRS’s Tax Collection

Sen. Joni Ernst from Iowa, who prompted this audit, pointed out the striking irony of the situation. She highlighted the fact that American taxpayers are footing an $80 billion bill for the Inflation Reduction Act, which was intended to boost the IRS’s audit capabilities.

Ernst remarked, “Surely the irony and hypocrisy can’t be missed here: taxpayers are being forced to pay billions more to the IRS to audit America while the agency won’t even collect the tens of millions of dollars in unpaid taxes owed by its employees.” This statement underscores the absurdity of a system that seems to demand the highest standards of tax compliance from the public while failing to hold its own employees accountable.

Disciplinary Inconsistencies and Lack of Accountability

The audit also examined 1,068 cases where IRS management had taken disciplinary actions against employees for tax issues. The findings were far from reassuring. The Treasury Inspector General for Tax Administration found that management often leniently handled these cases.

“76 employees were suspended. Most of these cases involved willful… cases resulting in the employee being suspended for less than 14 days,” the inspector general’s report noted. The report also uncovered that despite the law mandating termination for IRS employees who “willfully” engage in tax misconduct, only 20 out of 70 employees involved in such behavior between October 2021 and April 2023 were actually fired.

The report explained, “Although the law requires an employee who has either willfully not filed or willfully understated their taxes due to be removed, subject only to the IRS Commissioner’s mitigation, this disciplinary action is not always enforced.” This discrepancy in enforcing the law raises concerns about the accountability mechanisms within the IRS.

Our Take

The revelation that IRS employees owe $50 million in back taxes, while the agency aggressively audits American taxpayers, is more than just a bad joke; it’s a glaring example of institutional failure. It’s troubling to see such a massive discrepancy between what is demanded of the public and what is tolerated within the agency. This situation highlights a broader issue: if those in charge of enforcing tax laws can’t even follow them, how can we expect the system to work effectively for the rest of us? This lack of accountability not only undermines public trust but also exposes a critical flaw in the IRS’s operations.