The government is different from private employers, and the IRS is different from other parts of government. But when a former employer’s file says “DO NOT REHIRE” doesn’t that mean what it says? Not at the IRS. The report by the Treasury Inspector General for Tax Administration says the IRS rehired hundreds of problem former employees with prior substantiated conduct or performance issues, the kind most employers are happy to shed.
Not the IRS. The bad behavior that was later welcomed back with open arms ranged from unpaid taxes, unfiled tax returns, unauthorized access to taxpayer information, leave abuse, falsification of official forms, unacceptable performance, misuse of IRS property, and off-duty misconduct. The Treasury Inspector General concluded that the rehires pose increased risks to the IRS and taxpayers.
Firing and rehiring are being scrutinized these days. Even Congress wants to get in on the act. For example, dozens of House members put forward a bill to require the IRS to fire anyone who targets people or groups based on their political beliefs. A few Democrats even joined in. The Prevent Targeting at the IRS Act is a response to the scandal over IRS officials scrutinizing conservative groups seeking tax-exempt status. It would make it easier to fire IRS officials.
The bill from Rep. Jim Renacci (R-Ohio) would add political targeting to a list of reasons for immediately firing IRS workers. That list appears in Section 1203 of the Internal Revenue Service Restructuring and Reform Act of 1998. IRS employees must be terminated from Federal employment if they violate certain rules in connection with the performance of their official duties:
- Willful failure to obtain the required approval signatures on documents authorizing the seizure of a taxpayer’s home, personal belongings, or business assets;
- Providing a false statement under oath with respect to a material matter involving a taxpayer or taxpayer representative;
- With respect to a taxpayer, taxpayer representative, or other employee of the Internal Revenue Service, the violation of: (A) any right under the Constitution of the United States ; or (B) any civil right established under (i) title VI or VII of the Civil Rights Act of 1964; (ii) title IX of the Education Amendments of 1972; (iii) the Age Discrimination in Employment Act of 1967; (iv) the Age Discrimination Act of 1975; (v) section 501 or 504 of the Rehabilitation Act of 1973; or (vi) title I of the Americans with Disabilities Act of 1990;
- Falsifying or destroying documents to conceal mistakes made by any employee with respect to a matter involving a taxpayer or taxpayer representative;
- Assault or battery on a taxpayer, taxpayer representative, or other employee of the Internal Revenue Service, but only if there is a criminal conviction, or a final judgment by a court in a civil case, with respect to the assault or battery;
- Violations of the Internal Revenue Code of 1986, Department of Treasury regulations, or policies of the Internal Revenue Service (including the Internal Revenue Manual) for the purpose of retaliating against, or harassing, a taxpayer, taxpayer representative, or other employee of the Internal Revenue Service;
- Willful misuse of the provisions of section 6103 of the Internal Revenue Code of 1986 for the purpose of concealing information from a congressional inquiry;
- Willful failure to file any return of tax required under the Internal Revenue Code of 1986 on or before the date prescribed therefor (including any extensions), unless such failure is due to reasonable cause and not to willful neglect;
- Willful understatement of Federal tax liability, unless such understatement is due to reasonable cause and not to willful neglect; and
- Threatening to audit a taxpayer for the purpose of extracting personal gain or benefit.
Apart from misconduct, the IRS also faces budget scrutiny. Recently, key Senators, including Sen. Orrin Hatch (R-UT) and all other Republicans on the Finance Committee, fired off this letter to IRS Commissioner John Koskinen. The letter was in response to the IRS chief’s warning of a bad tax filing season due to budget cuts. It’s not budget cuts that are to blame, the Senators, suggested, it’s IRS waste. Some of the IRS expenses that bothered the Senators? How about these hard to understand IRS moves:
- Paying millions of dollars in bonuses and giving tens of thousands of paid vacation hours to employees with recently substantiated conduct issues and disciplinary actions, including bonuses to 1,100 employees owing back taxes;
- Spending over $23 million and more than 500,000 working hours devoted to union activity, as well as hundreds of thousands of dollars for union travel expenses;
- Spending billions of dollars every year on information technology systems – roughly twenty percent of its entire budget.
For alerts to future tax articles, follow me at Forbes.com. Email me at Wood@WoodLLP.com. This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.
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