IRS Miscalculates Payroll by Millions

IRS Miscalculates Payroll by Millions

Its kind of ironic to hear that the IRS (Internal Revenue Agency), a company whose sole purpose is the administration and enforcement of the Treasury Department Revenue law, messed up big time on how much they have paid their employees. Smells a lot like double standards from this side of the fence.

This report ( ) by the TIGTA (Treasury Inspector General for Tax Administration) outlines the issues of salary miscalculations, largely blaming the problem on complex pay-setting rules.

IRS Miscalculates Payroll by Millions

April 22, 2017 No Comment(s)

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How bad was it?

Well, the IRS overpaid more then 600 employees by $4.2M, while underpaying over 900 employees by $2.7M, for a total of $6.9M in salary miscalculations . I suspect the employees of this association, who probably aren’t that happy to begin with, are quite irritated about the news.

The needlessly complex pay rules dictate different pay settings for managerial and non-managerial positions, with many employees moving back and forth from permanent positions to temporary management positions (and back again!) frequently, combined with a large number of just seasonal employees. There’s also a problem of inconsistent training between offices on proper procedures of setting pay to further complicate matters- so its really a mystery how anyone gets paid properly there.

These errors have a huge impact on employees, as any over payment by the IRS requires full reimbursement, leaving many employees with over $5,000 in debt from a recent promotion. Even if the overpayment is discovered years later, the employee is still responsible for repayment. Among the employees affected, many have issued numerous complaints, while some have even had to delay their retirement, or experienced medical issues as a result . Yikes!

If you are a business owner don’t let this happen to you. Sometimes all you need is the right company to help manage payroll (hint, hint!), or a diligent calculations process, with auditory protocols. Small business owners may want to try an online payroll calculator to double-check their work.

The next chapter.

The IRS claimed to have introduced a second level of quality review, to mitigate the risk of having such payroll miscalculations in the future. The IRS has also agreed to address the overpayments and underpayments, and will introduce eight-module pay training for all HR staff to create consistency between offices.

I think its safe to say that the IRS will not be making the top 10 best places to work this year but hey, there’s always next year.

Blog April 22, 2017 No Comment(s)

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