Bipartisan bill would ban bonus pay for feds with conduct issues

Mar. 22, 2014: U.S. Sen. Kelly Ayotte gestures during a press conference at the American Embassy in Kabul, Afghanistan.

Bipartisan legislation introduced Tuesday would prevent federal employees from receiving bonuses if they have been disciplined for tax and conduct issues.

Sens. Kelly Ayotte, R-N.H., and Claire McCaskill, D-Mo., are sponsoring the bill inspired by a recent government report describing how the Internal Revenue Service paid more than $2.8 million in bonuses to employees with disciplinary problems.

"Federal employees who have disciplinary problems or who haven't paid their taxes shouldn't be getting bonuses," Ayotte said in a statement. "Taxpayers in New Hampshire and across the nation were alarmed by recent reports of IRS employees being awarded bonuses that they shouldn't have received."

The report by the Treasury Inspector General for Tax Administration found that between October 1, 2010 to December 31, 2012, over 2,800 IRS employees who had been disciplined for conduct problems, including issues with federal tax compliance, had received over $2.8 million in monetary awards and over 27,000 hours in time-off awards.

The watchdog also found that the more than 1,100 employees who had issues with tax compliance received more than $1 million in monetary awards and more than 10,000 hours in time-off awards.

"The notion that taxpayer dollars would be used to pay cash bonuses to employees who've engaged in conduct that could get them fired or sent to jail is outrageous-and our bill would put an end to it," McCaskill said in a statement. "If we're going to restore Americans' confidence that their federal government is spending money wisely, then this is a commonsense step in that direction."

The "Stop Wasteful Federal Bonuses Act" would prohibit an agency head from awarding bonuses to an employee after an official determination that the worker's conduct either violated an agency policy that carries a punishment of firing or suspension or violated a law for which the worker could be imprisoned for more than a year.

The proposal also includes a provision requiring the employee to repay the amount of any bonus made during the year in which such a determination is made, following a notice and an opportunity for a hearing, according to a news release.

For the IRS's part, they say a new policy has already been developed linking conduct and performance bonuses for executives and senior level employees. The agency is considering implementing a similar policy for the entire IRS workforce.

The Associated Press contributed to this report.