On July 24, the Treasury Inspector General for Tax Administration (TIGTA) issued a report criticizing the IRS for hiring more than 200 employees with previous conduct and performance issues. The report found that 10 percent of the more than 2,000 former employees rehired by the IRS between January 2015 and March 2016 had been previously fired while under investigation for a substantiated conduct or performance issue.
Of the more than 200 rehired employees, 86 had been “separated” from the IRS while under investigation for absences and leave, workplace disruption, or failure to follow instructions. Four had been terminated or resigned for willful failure to properly file their federal tax returns; while another four employees had been separated from their jobs while under investigation for unauthorized accesses to taxpayer information. On top of that, 27 former employees didn’t disclose a previous termination or conviction on their application, as required, but were nonetheless rehired by the IRS.
“Rehiring hundreds of employees with a track record of substantiated conduct and performance issues, including willful tax noncompliance and unauthorized access to tax records, is not prudent and unnecessarily increases the risk of internal fraud and abuse,” said TIGTA Inspector General J. Russell George in a statement. “Given the threat of identity theft and the amount of sensitive information that the IRS manages, job offers should only be extended to applicants of great integrity.”
This audit was requested by a U.S. Senator who wanted to know if the IRS had changed its hiring policies to fully consider past conduct and performance issues prior to hiring former employees. Given the treat of identity theft and the magnitude of sensitive information that the IRS holds, it would seem obvious that hiring employees of high integrity is essential to maintaining public trust in tax administration and safeguarding taxpayer information.
What TIGTA learned is that the IRS’s Human Capital Officer doesn’t give officials who hire former employees access to information about their past conduct and performance issues. IRS officials told TIGTA it would be cost prohibitive to review previous issues before a hiring decision and tentative offer could be made. However, the IRS couldn’t give TIGTA any documented support for this position. TIGTA also couldn’t verify the IRS previous issues because its reviews aren’t always documented.
In response to this audit, acting IRS human capital officer E. Faith Bell stated “The Internal Revenue Service agrees in principle with the recommendations, and will update current practices and policies to ensure ALERTS data reflecting prior performance and misconduct of a former employee is generated and utilized in the hiring process, and that any decision to hire former employees identified as having misconduct and performance issues is documented, articulating the basis for re-hire. To the extent permissible by law, IRS will take all steps allowable to prevent the rehiring of former employees with conduct and performance issues.”
What Can Be Learned from this Story? First, although the IRS requires taxpayers to maintain documentation to support their tax deductions, the IRS is lax with its internal documentation procedures. Second, the IRS image with the public will continue to be suspect if IRS doesn’t change its procedures when hiring former employees to ensure that they are ethical and respect the rights of taxpayers. Third, taxpayers who represent themselves before the IRS are placing themselves at a greater risk than those who engage a tax professional because they are not familiar with their taxpayer rights and could conceivably be taken advantage of by one of this former employees.
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