Treasury Inspector General for Tax Administration
July 27, 2017
Contact: Karen Kraushaar, Director of Communications
WASHINGTON — The Internal Revenue Service (IRS) rehired employees with previous substantiated conduct and performance issues, according to an audit report that the Treasury Inspector General for Tax Administration (TIGTA) issued today. TIGTA found that over 200 (approximately 10 percent) of the more than 2,000 former employees whom the IRS rehired between January 2015 and March 2016 had been previously terminated or separated from the tax agency while under investigation for a substantiated conduct or performance issue.
The overall objective of this audit, which was requested by a U.S. Senator, was to follow up on a previous report to determine whether IRS management updated hiring policies to consider past conduct and performance issues before hiring former employees.
Of the more than 200 rehired employees, 86 had separated 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; and four separated while under investigation for unauthorized accesses to taxpayer information. In addition, TIGTA found that 27 former employees failed to disclose a prior termination or conviction on their application, as required, and were rehired by the IRS.
TIGTA also found that the IRS has not effectively updated hiring policies to consider past IRS conduct and performance issues before making a tentative decision to hire former employees, including those the IRS terminated or separated during an investigation of a substantiated conduct or performance issue. Although the IRS follows specific criteria to disqualify applicants for employment, past IRS employment history is not provided to the selecting official for consideration in the hiring process. IRS officials stated that it would be cost prohibitive to review previous issues before a hiring decision and tentative offer has been made. However, the IRS was unable to provide documented support for this position. In addition, TIGTA could not verify that the IRS always considered prior issues because reviews are not always documented.
“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 J. Russell George, Treasury Inspector General for Tax Administration. “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,” he added.
TIGTA recommended that the IRS Human Capital Officer provide the selecting official with access to former employee conduct and performance issues, and require that the basis for rehiring employees with prior employment issues be clearly documented. IRS management agreed with all recommendations and plans to implement corrective actions.
Read the report.
Note: The difference between the date TIGTA issues an audit report to the Internal Revenue Service and the date TIGTA publicly releases the report is due to TIGTA's internal review process to ensure that public release is in compliance with Federal confidentiality laws.