The Chairman’s Report August 9th, 2024

IOWA SENATOR JONI ERNST  DEMANDS COMMISSIONER WERFEL FOLLOW THE LAW

In a letter to IRS Commissioner Werfel dated July 29, 2024, Senator Ernst stated:

•  Dear Commissioner Werfel, Thank you for committing to “trying to rebuild trust” in the IRS by holding the agency “accountable to taxpayers.”
• Today is a great day to demonstrate the seriousness of that pledge by making the thousands of tax-evading tax collectors at the IRS either pay up or pack up.
• The Treasury Inspector General for Tax Administration (TIGTA) completed an investigation at my request that has identified thousands of IRS employees who owe tens of millions of dollars in unpaid taxes.
• Collectively, more than 5,800 employees of the IRS and its contractors were found to owe nearly $50 million in overdue taxes.
• Of the 3,323 IRS employees with unpaid taxes, 2,044 owing more than $12 million were not on a payment plan.
• Of the 2,484 IRS contractor employees with unpaid taxes, 1,729 owing more than $17 million were not on a payment plan.
• Despite the IRS having the statutory authority to terminate employees who willfully fail to file tax returns or understate their tax liability, just 20 employees found to be tax cheats were removed as a result.
• Over 500 former IRS employees with tax compliance issues or conduct and performance problems, including criminal misconduct, sexual misconduct, inability to perform duties, fighting and assault, and unauthorized access to tax return information, have been rehired by the agency and its contractors.
• Of these, 282 rehires had multiple previously documented conduct and performance issues.
• Government-wide, TIGTA found 149,000 federal employees owe an astounding $1.5 billion in unpaid taxes.
• Tens of thousands are repeat tax cheats, failing to file tax returns year after year, and the number is steadily increasing.
• There is absolutely nothing fair about forcing hardworking Americans to pay the salaries of tax evading tax collectors while the IRS targets lower-income and middle-class Americans with nearly two-thirds of the new audits.
• While the IRS warns, “tax evasion is a serious crime punishable by imprisonment, fines, and the imposition of civil penalties,” the agency is doing nothing to punish the criminals on its own payroll.
• You currently have the authority to terminate employees for willful violations of tax law but aren’t doing so. 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.
• Section 1203 of the Internal Revenue Service Restructuring and Reform Act of 1998 (Public Law 105-206, 112 Stat. 685) directs the IRS to terminate an employee for willfully failing to file a tax return or understating tax liability but provides the commissioner with the discretion to mitigate the penalty.
• I am proposing the Audit the IRS Act requiring regular tax audits of agency employees and prohibiting the IRS from hiring or continuing to employee tax evaders. I welcome your support for this bill that strengthens your ability to collect billions of dollars in unpaid taxes.
• I would also like to know what actions you are taking to ensure 100 percent tax compliance by IRS employees and contractors.
• To hold the IRS accountable and to demonstrate the agency takes its own warning that “tax evasion is a serious crime,” I would strongly urge you to routinely check the tax status of every employee and fire every employee and contractor who is delinquent on their taxes and not enrolled in a payment plan.
• Repeat offenders should be referred to the Department of Justice and “subjected to imprisonment, fines, and the imposition of civil penalties,” the penalties listed as punishment for tax evasion on the IRS’s website.  

• Is so simple everyone can understand it and not need to hire a tax preparer.
• Shows the costs of the federal government on every retail receipt so all of us understand what we are paying and so all of us can determine if we are getting benefits that are worth the cost.
• Helps U.S. companies compete with foreign competitors and not move overseas.
• Keeps jobs in the U.S. rather than exporting them to other countries.
• Permanently establishes the solvency of Social Security and Medicare.
• That eliminates special treatment for any group of taxpayers.
• Benefits lower income groups more than the present income/payroll tax system.
• Allows each of us, not the Elites and their minions, to determine the amount of federal tax we pay.
• THAT IS THE LARGEST TRANSFER OF POWER FROM D.C. TO THE PEOPLE SINCE THE CONSTITUTION WAS ADOPTED.