A review by internal auditors at the Internal Revenue Service confirms that top executives at the IRS who traveled extensively for tax agency work did not have certain federal tax laws applied to them - as they would be to ordinary Americans - for what is known as Long Term Taxable Travel (LTTT).
This issue surfaced in July of 2013, when IRS investigators found that a small group of top executives ran up "extremely high travel expenses" by commuting each month to work - by plane - from where they lived in Dallas, Minneapolis and Atlanta.
"An employee who performs temporary duty travel exceeding one year at a single or principal location is subject to income taxation of his/her travel expense reimbursements," read a report from the Inspector General at the IRS.
The report found that the rules were in place on taxable travel expenses - but they weren't applied to IRS executives for their own extended work travel on tax agency business.
"As a result, we found executive travelers who appeared to have had taxable travel that was not properly classified as LTTT," read the report.
Boiled down to the basics, the executives were having their commuting costs paid for from another city - in some cases for several years - and should have paid taxes for such long term travel to their regular duty post in Washington, D.C. and other cities.
"Until January 2012, the IRS did not have a control in place to ensure that travelers and managers properly identify and report the LTTT," the report noted.
The review of travel records by investigators found several IRS executives who should have paid taxes for their travel reimbursements, did have that "retroactively calculated."
But one IRS employee told me that if these were regular taxpayers, they would have also owed penalties and interest for the failure to pay their taxes in a timely fashion.
The new report found nine IRS executives should have been flagged for taxable travel reimbursements, "because the employees continuously traveled for assignments lasting more than one year."
"Of the nine cases that appeared to have been incorrectly classified as nontaxable, the average days of travel was 140.5 per case, and the average travel reimbursements was $51,420," the report stated.
You can read the latest IRS IG report on Long Term Taxable Travel.
The original report on IRS executive travel from 2013 is here, which details how some of IRS executives ran up travel bills in 2011 of over $100,000.
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