Who Watches the Watchdog? IRS Faces Ethical Issues

Of all targets, there is perhaps no more “beloved’ target to attack these days than the IRS who are facing a number of ethical issues. For many people, it is pure delight to watch the watchdogs turn and squirm as the light shines on their misdeeds. Whether, they are caught scrutinizing the Tea Party, spending millions at silly-themed conventions, or are secretly taped doing line dances at employee team building exercises, many relish in their misdeeds at missteps.  I however do not…

Now the latest.

According to a Reuters report posted on MSNBC (May 29, 2013) entitled: Some IRS Employees Misuse Travel Credit Cards: Watchdog, between 2010 and 2011, about 1,000 IRS employees misused their travel credit cards. They were “caught” by the U.S. Treasury Inspector General for Tax Administration. The IRS admitted that although the misuse was relatively low (there are about 90,000 IRS employees), that it was still a serious issue.

“As its mission includes requiring taxpayers to pay taxes owed on time and voluntarily, the IRS should take further steps to address employees who do not voluntarily pay their travel card bills on time,” said J. Russell George, the inspector general. “Identified misuse should be met with appropriate disciplinary action.”

“Mis-use” can take on many faces. In most cases, it probably involved seemingly innocent behavior; for example, an IRS employee on a business trip who may have inadvertently placed a dry-cleaning charge on a travel credit card then forgot to reimburse the IRS.

While the article reported that IRS employees spent about $121 million on trips during their sojourns to the field during that period, we don’t know the exact percentage of those who neglected to pay back personal expenses charged to credit cards, though it was said to be about 1 percent of the employees. What we don’t know is how much money that represented. Still, it was about 900 people.

However, there’s a bigger issue, an ethical issue we need to talk about today. According to the Reuters investigation:

“The travel card report said that when the IRS disciplines employees for card misuse, they generally impose less severe penalties than their internal guidelines suggest.”

Who’s watching?

This is obviously much more than an IRS issue. It is an issue of power and privilege and slippery slopes. For the report also mentioned that:

“…’hundreds of cardholders’ with evidence of significant financial problems, were not referred to re-evaluation for national security clearance or background checks.”

We have to wonder how penalties are assessed at the IRS. We have to wonder how those with significant problems were identified and punished – or let go.

Clearly, I have seen such abuse in a number of organizations. For example, I have heard stories of employees called out on the carpet for minor infractions while board members within the same organizations were let off with a wink and a nod for exorbitant personal dinners and the abuse of privileges. I am sure you have heard of such stories as well.

If penalties are to be imposed for infractions should they not be imposed equally? If an organization, be it government or corporate, sets guidelines shouldn’t the guidelines be enforced?

I teach people about consequences; ethical missteps lead to consequences. Suppose there are no consequences for some, and severe consequences for others for the same mistake? And perhaps worse, suppose the established policies are little more than “window dressing” that are typically ignored, and never as severe as detailed – except for some. What happens to an organization where such is the case?

In regard to the IRS, while we may not relish the idea of paying taxes, it is something we must do as members of this society. I also feel that despite the jokes, that of the 90,000 people who work for the IRS, most of them are pretty decent people who, in fact, pay taxes. I would also imagine that more than a few of the decent employees get pretty steamed when others have gotten away with a slap on the wrist.

Abuse of privileges, the lack of ethical accountability, uneven application of written policies not only erode trust in an organization from without, but erode the foundations of an organization from within. Once the ethical door is opened, the next person who comes along might very well try to push the boundaries a little more.

I am not at all surprised that the IRS has been under such scrutiny as of late; it was bound to happen. When employees start to fall down that slippery slope there is no telling where they will stop. Enough people sliding down enough slopes will eventually cause attention!

To fully understand the results of ethical consequences is to understand how some companies succeed and others fail. More shake-up’s will occur at the IRS and more stories will emerge. It is important to remember that while they are currently sitting in the hot seat, they are other organizations sitting not far away.

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