IRS Rehired Hundreds of Misbehaving Employees with Conduct Problems

The Internal Revenue Service rehired hundreds of former employees with prior conduct or performance issues, including employees who failed to file their taxes, falsified official forms and misused IRS property, according to a new report.

The report, from the Treasury Inspector General for Tax Administration, acknowledged that most rehired employees do not have performance or conduct issues associated with prior IRS employment. However, TIGTA said it identified hundreds of former employees with prior substantiated conduct or performance issues ranging from tax issues, unauthorized access to taxpayer information, leave abuse, falsification of official forms, unacceptable performance, misuse of IRS property, and off-duty misconduct.

TIGTA reviewed a random sample from more than 300 employees with significant prior performance or conduct issues who were hired between January 2010 and July 2013 and determined that the IRS appropriately applied OPM suitability standards, such as determining whether applicants had prior criminal activity, material false statements, or illegal drug use.

“Based on the types of prior performance and conduct issues we identified, rehiring certain employees presents increased risk to the IRS and taxpayers,” said TIGTA Inspector General J. Russell George in a statement.

TIGTA found that nearly 20 percent of the rehired former employees sampled with prior substantiated or unresolved conduct or performance issues had new conduct or performance issue, such as tax noncompliance or unauthorized access to tax account information.

Between January 2010 and September 2013, IRS records show that the IRS hired more than 7,000 former employees, 78 percent of which were temporary or seasonal positions. Hundreds of former employees were rehired, even though they had previous conduct or performance issues. For example, 141 former employees with prior substantiated tax issues, including five who the IRS found had willfully failed to file their federal tax returns, were hired. Other substantiated issues from previous IRS employment included unauthorized access to taxpayer information, leave abuse, falsification of official forms, unacceptable performance, misuse of IRS property, and off-duty misconduct.

Although they may meet OPM suitability standards, rehiring prior employees with known conduct and performance issues presents increased risk to the IRS and taxpayers, TIGTA noted.

During the audit, IRS officials stated that prior conduct and performance issues do not play a significant role in deciding the candidates who are best qualified for hiring and that they believe they are applying Office of Personnel Management suitability standards appropriately. In addition, IRS officials stated that the OPM and IRS General Legal Services should be consulted to determine if full consideration of prior conduct and performance issues violates federal regulations.

TIGTA recommended that the IRS Human Capital Officer work with General Legal Services and the OPM to determine whether and during what part of the hiring process the IRS can fully consider prior conduct and performance issues.

IRS management agreed with the recommendation and said they have already requested written opinions from General Legal Services and the OPM but believe that the current process is adequate to mitigate any risks to American taxpayers.

“IRS already fully considers prior conduct and performance issues before the final job offer is issued to all new hires,” wrote IRS human capital officer Daniel T. Riordan in response to the report.

However, TIGTA said it remains concerned because IRS records indicate it is hiring individuals with significant prior conduct and performance issues.

The IRS provided a further response in an email to Accounting Today. “The IRS is committed to providing the best possible service to American taxpayers and is working to ensure it fully considers prior conduct and performance issues before the final job offer is issued to all new hires,” said the IRS in a statement. “It’s important that the Inspector General for Tax Administration noted we have followed government hiring guidelines. In addition, we have implemented a new, more rigorous, consistent standard for reviewing the suitability of job applicants since 2012. Consistent with that commitment, in 2012, the IRS has accepted TIGTA’s specific recommendation that we further consult with IRS General Legal Services to look to further strengthen our processes. We believe our new, rigorous standard addresses many issues raised in this report. We remain committed to working with TIGTA and other partners to address these important issues and will look for additional ways to improve.”