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61 percent of IRS employees who violated tax laws got to keep their jobs, report says

The Internal Revenue Service allowed 61 percent of its employees who violated tax laws to remain on the job, according to a report by the service’s inspector general.

The report (PDF) considered the fate of 1,580 IRS employees found to have willfully violated tax laws over a 10-year period beginning in 2003, report the Wall Street Journal Law Blog, UPI, the Atlanta Journal-Constitution and TaxProf Blog. Thirty-nine percent resigned, retired or were fired. The others got lesser penalties such as suspensions and reprimands.

Some of those who didn’t comply with the laws overstated expenses, claimed a credit for first-time home-buyers even though they didn’t buy a house, and failed to file returns on time.

In a sample of 34 cases, the report found that employee penalties were inconsistent, and individuals with significant violations were not necessarily fired.

The agency said its employees have a tax compliance rate of more than 99 percent, but it agrees it can improve its disciplinary system.