"We no longer pay performance awards to employees who have willfully failed to pay their taxes."
Critics of the Internal Revenue Service may think that statement from Commissioner John Koskinen is an April Fools' joke. After all, the agency had been shooting itself in the foot for years now.
And such a forgiving financial reward program was just one example of how badly the IRS operated. Congress and taxpayers were incensed last April when the Treasury Inspector General for Tax Administration revealed that the IRS had awarded $1 million in bonuses to employees who owed Uncle Sam taxes.
But the IRS commissioner's announcement of the bonus system change is not an April 1 prank.
First, it came from Koskinen a day earlier, on March 31 as part of his speech before a National Press Club luncheon audience.
Second, Koskinen, who has repeatedly felt the wrath of Representatives and Senators since he took over the troubled tax collection agency 15 months ago, knows better than to joke about the many problems the IRS had before he arrived.
IRS errors, improvements: The list of IRS problems seems like a collection of bad April Fools' Day jokes. Questionable tax-exempt status review tactics. Excessive expense for conferences. Bad videos. Rewarding employees who aren't complying with tax law.
Sadly, for the IRS and taxpayers, those instances were no laughing matters.
But the IRS commish assures us that those dark days are done. Koskinen took advantage of the National Press Club stage to detail how the agency has moved forward, putting its previous problems to rest and implementing procedures to ensure they don't happen again.
The recent criticism of the IRS for its missteps "is absolutely deserved," Koskinen told the Washington, D.C., group. "But what gets lost is that these mistakes occurred several years ago, and we have taken concrete steps to address them."
Tax-exempt troubles: With regard to problems in evaluating organizations' requests for tax-exempt status, aka the Tea Party targeting, Koskinen said that the IRS has acted on all of the Inspector General’s recommendations to fix the management problems identified nearly two years ago.
"These problems should not have happened, and we continue to work to make improvements to insure that they never happen again," the commissioner said.
And there's good news for the groups seeking this preferable tax status.
When Koskinen became IRS chief in late December 2013, the agency had a backlog of more than 60,000 applications from groups seeking status as private, nonprofit organizations. Thanks to new review processes and introduction of a simpler form for small groups, Koskinen said the IRS is now current on tax-exempt status applications.
Conference, video excesses: Then there were the conferences. Koskinen says the IRS has reduced its events spending by 80 percent since 2010.
"Not only that, but we require all conferences costing above $20,000 to get prior approval from the IRS Commissioner, otherwise known as me," he said. Any expense in excess of $50,000 requires the approval of the IRS chief and the Treasury Department.
As for videos, Koskinen says the IRS is focusing on ones aimed at helping taxpayers, instead of parodying old television shows. The IRS' YouTube channels are home to more than 100 videos that have been viewed nearly 9 million times so far.
"What’s more, the much-criticized videos from years ago could not be made today," he added. "Any IRS division seeking to make a video must receive prior approval from an executive review board the agency created more than two years ago."
Bonuses revised: Finally, there's the money.
"And not to miss anything that people might have listed to justify cuts to our budget, we no longer pay performance awards to employees who have willfully failed to pay their taxes," Koskinen said.
He also noted that tax compliance rate of IRS employees is more than 99 percent, "by far the highest compliance rate of any government agency. And we are working to insure that no former employee with a serious performance problem is rehired."
Mention of missing e-mails missing: The topic of e-mail came up in Koskinen's post-speech question and answer session, but not in the context that IRS watchers might have expected.
There was no mention of or even passing reference to missing e-mails from former IRS exempt division chief Lois Lerner in Koskinen's speech. Republicans in Congress are still trying to find thousands of her computer messages that apparently were destroyed and that they believe could shed light on the tax-exempt application scandal.
Instead, another former government official's e-mails were obliquely touched on when, in the discussion after his formal remarks, Koskinen said that the IRS' long-standing policy is that its employees are not to do business on their private e-mail system.
"Our strong policy is you can't do business on your personal e-mail account," Koskinen said. "I'm confident that we continue to enforce and remind people about that policy across the agency. We have 87,000 people, does that mean no one is doing it? I can't guarantee that. But I can guarantee we are keeping a close watch on it, and if someone is doing [that] they will hear from us soon."
Days of IRS past: Koskinen acknowledged that the IRS issues of recent years were serious problems that deserved attention and the remedies that finally have been have applied.
But, added the commish, "they are from a prior era. We have addressed them so they will not happen again. That really does make it a new day at the IRS. It’s not the IRS of 2010, 2011 or even 2012."
Here's hoping for everyone's sake that the IRS commissioner isn't joking, or the last laugh will again go to the agency's critics in Congress.
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