In addition, a 1997 IRS internal study found that actions taken against lower-level employees more closely conformed to the IRS table of penalties than actions taken against higher-graded employees. Alleged Delays by IRS Deputy Commissioner on Senior Executive Service Misconduct Cases

On the basis of our review of SES cases, we did not find a case in which an individual who was ineligible to retire at the time an allegation was filed, retired while the case was pending with the Deputy Commissioner. In doing our analyses, we focused on actual retirements and did not reach general conclusions about eligibility to retire. Concerning allegations of IRS retaliation against taxpayers, we reported in 1996 and 1998 that IRS did not systematically capture information needed to identify, address, and prevent such taxpayer abuse. We could not determine the extent of reprisal against whistleblowers because IRS did not track information on whistleblower claims of reprisal. Alleged Improper Zeroing Out or Reduction of Recommended Tax

With respect to allegations of improper zeroing out or reductions of recommended tax by IRS managers, we found no evidence to support the allegations in the eight specific cases referred to us by the IRS employees who testified at the hearings. On the other hand, IRS does not systematically collect data on the extent to which additional taxes recommended by IRS auditors are zeroed out or reduced without a basis in law or IRS procedure. Accordingly, our objectives were to (1) determine if senior Internal Revenue Service (IRS) managers received the same level of disciplinary action as line staff; (2) determine to what extent, if any, the IRS Deputy Commissioner might have delayed action on substantiated cases of employee misconduct until senior managers were eligible to retire; (3) ascertain the extent to which IRS employees might have retaliated against whistleblowers and against taxpayers or their representatives who were perceived as uncooperative; (4) determine the extent to which IRS employees might have zeroed out or reduced the additional tax recommended from examinations for reasons not related to the merits of the examinations; and (5) describe equal employment opportunity (EEO) issues in IRS offices in the Milwaukee metropolitan area.
Why GAO Did This Study

Pursuant to a congressional request, GAO provided information on alleged misconduct by Internal Revenue Service (IRS) employees in their treatment of other IRS employees and taxpayers, focusing on: (1) the specific allegations made at the Senate Committee on Finance hearings; and (2) any underlying systemic or programmatic problems that need to be resolved to protect the rights of taxpayers and IRS employees.

What GAO Found

GAO noted that: (1) available data showed significant differences between Senior Executive Service and line staff disciplinary cases in terms of dispositions and processing times; (2) IRS found that actions taken against lower-level employees more closely conformed to its established table of penalties than actions taken against higher-graded employees; (3) regarding the allegation that the Deputy Commissioner delayed action on senior manager misconduct cases until the managers were eligible to retire, GAO focused on actual retirements and did not reach general conclusions about eligibility to retire; (4) GAO found no cases in which an individual who was ineligible to retire when an allegation was filed, retired while the case was pending with the Deputy Commissioner; (5) GAO could not determine the extent of reprisal against whistleblowers because IRS did not track whistleblowing reprisal cases; (6) regarding allegations of IRS retaliation against taxpayers, GAO previously reported that IRS information systems were not designed to identify, address, and prevent such taxpayer abuse; (7) with respect to allegations of improper zeroing out or reductions of recommended taxes by IRS managers, GAO found no evidence to support the allegations in the eight specific cases referred to GAO by the IRS employees who testified at the hearings; (8) on the other hand, IRS did not systematically collect data on how much additional taxes recommended by auditors were zeroed out or reduced by IRS employees without a basis in law or IRS procedure; (9) IRS has acknowledged equal employment opportunity-related problems, including problems in hiring and promotion, in its Midwest District Office and has begun addressing them; and (10) IRS' lack of adequate information systems and documentation in the areas of employee discipline, retaliation against whistleblowers and taxpayers, and zeroing out of recommended taxes prevented GAO from doing a more comprehensive analysis of these issues.