IRS Re-Hired Employees Who Performed Poorly or Misbehaved

In its quest for tax expertise, the Internal Revenue Service in recent years has rehired more than 300 past employees who had been forced out or left while under investigation for performance or misconduct issues, a watchdog reported.

Though most of the 7,168 former employees called back from January 2010 to July 27, 2013, had unblemished records, some 824 (about 11 percent) had prior “substantiated employment issues,” according to a report by the Treasury Inspector General for Tax Administration. Some 141 of the retreads had unresolved tax issues, including five who hadn’t filed a return.

“Based on the types of prior performance and conduct issues we identified, rehiring certain employees presents increased risk to the IRS and taxpayers,” said J. Russell George, the inspector general, in a statement accompanying the report dated Dec. 30 but released on Thursday.

The 108 who had documented misconduct issues were guilty of unauthorized access to taxpayer accounts; fraud or falsification of employment forms or documents; email, Internet or property misuse; absence without leave; or failure to follow instructions (the most prevalent issue).

The IRS was not oblivious to the problem when it rehired alumni for what are usually temporary or seasonal positions. TIGTA’s random in-depth sample of rehired employees with employment issues determined that the IRS correctly applied standards from the Office of Personnel Management’s Suitability Processing Handbook in 46 of 48 cases.

That booklet divides the hiring process into an eligibility phase, a suitability phase and a qualifications phase, the last of which includes review of any past misconduct, criminality, false statements, refusal to furnish testimony and alcohol or drug abuse.

Examples of misconduct include threats, sexual harassment, unprofessional conduct, off-duty misconduct and criminal misconduct.

The problems weren’t all in the past, TIGTA noted. Twenty percent of 323 rehired employees with “substantiated or unresolved prior conduct or performance issues” ended up with “new conduct or performance issues (such as tax noncompliance or unauthorized access to tax account information),” the report said.

IRS officials reviewing a draft said prior conduct and performance issues do not play a significant role in deciding the best-qualified candidates and that they believe they are applying OPM suitability standards appropriately. The agency also said OPM and IRS General Legal Services should be consulted to determine whether full consideration of prior conduct and performance issues violates federal regulations.

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

IRS managers generally agreed, but argued that the current process is sufficient. “However, TIGTA remains concerned because IRS records indicate it is hiring individuals with significant prior conduct and performance issues,” the report said.

(Image via Ismagilov / Shutterstock.com)