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A number of IRS contractor employees improperly had access to sensitive IRS systems despite having tax debts and instances of nonfiling of taxes, the Treasury Inspector General for Tax Administration reported.
The Treasury Inspector General found 5 percent of the 13,591 IRS contractors had $5.4 million in federal tax debt. It also found 352 were not on a payment plan to resolve their tax debt.
Most of the contractor employees appeared to have been compliant when their initial access to systems was granted, according to the Treasury Inspector General. However, at least 319 contractor employees had tax debt assessed after they were granted staff-like access, and these employees were not currently on a payment plan. Under IRS policy, these 319 contractor employees were not eligible for staff-like access and should not have had access to IRS facilities, systems and data.
“Because many contractor employees have access to sensitive IRS systems and facilities, the IRS should address tax noncompliance for these employees in a similar manner as it would for its own employees,” said Treasury Inspector General for Tax Administration J. Russell George.
The IRS does not continuously monitor contractor employees as it does internal employees. Instead, contractor employees are reviewed only once every five years.
The Treasury Inspector General made three recommendations, which IRS management agreed with:
- The IRS continuously monitor contractor employee tax compliance similar to the way IRS employee federal tax compliance is monitored.
- When revalidating contractor employee staff-like access after a break in service longer than two years, the IRS should complete a tax compliance check.
- The IRS should further evaluate the contractor employees the Treasury Inspector General identified as potentially noncompliant and promptly bring those individuals into compliance or remove them from IRS contracts.