Unlike tax attorneys, IRS employees are not subject to any ethical or moral standards. Take the case of Wormley v. Department of the Treasury. The Wormley case presents the unusual question as to whether an IRS employee should be fired if she is arrested and convicted of assault for “biting off a portion of her neighbor’s thumb during a physical altercation.”
The Court Opinion Sets Out The Following Facts:
Patricia Wormley was employed as an IRS tax examining clerk in Philadelphia. Wormely was belligerent with her manager when the manager attempted to discuss Wormley’s training period performance. The IRS discovered that Wormely had been arrested when the IRS was investigating Wormley’s background (apparently after Wormely was already employed with the IRS).
After Wormely was convicted of simple assault, the IRS issued a letter to Wormley indicating that she would be removed from her position due to (1) her attack upon her neighbor, (2) her assault conviction, and (3) her inappropriate behavior toward her manager. The letter also mentioned that Wormley had “three [prior] instances of misbehavior.”
Wormely appealed the IRS determination. The IRS, an administrative law judge, and the Court of Appeals for the Federal Circuit held that “the removal penalty was reasonable considering Ms. Wormley’s potential for behaving violently and that her job involved working in close proximity to her co-workers and dealing personally with the general public.”
The Wormely case highlights one of the major problems with the IRS; namely, IRS employees are not held to any ethical or moral standard. Three documented instances of “misbehavior” should be sufficient to warrant termination – absent an arrest for assault or confronting an IRS manager (If there were three documented instances of “misbehavior,” one is left wondering how many instances of “misbehavior” were not documented).
The Taxpayer Bill of Rights is the only body of rules that come close to imposing standards on IRS employees, but these Rights are so basic that they do not really address ethical or moral standards for IRS employees.
Compare this to the lengthy do and do-not standards imposed on tax attorneys via state bar ethics rules, administrative rulings, court cases, and even IRS proclamations.
As the tax practitioner community is well aware, the IRS has been working on Circular 230 and its Office of Professional Responsibility to “strengthen professional standards” for non-IRS employee tax practitioners.
My personal opinion is that the IRS should extend these new “high” Circular 230 standards to its own employees before even beginning to think about extending them to non-IRS tax practitioners. This seems like a logical step if the goal really is to “strengthen professional standards.”
If Wormley were subject to Circular 230, she would probably have found herself before the United States Merit Systems Protection Board much sooner — perhaps with her first, second or third instance of misconduct.
Until the IRS opts to impose any standards on its employees, non-IRS employee tax attorneys will have to advise their clients that the “rule of thumb” is that IRS employees are not bound by any moral or ethical standards and that, absent extreme circumstances, IRS employees who “misbehave” will not lose their jobs and they will not be subject to any other IRS sanctions.