The ethical and moral standards for IRS employees are not as stringent as those that are imposed by non-government agencies. There are however some minimal standards that apply, which are in addition to remedies for misstatements by IRS employees.
The IRS Restructuring and Reform Act of 1998 was enacted to improve taxpayer rights and service, provide more oversight and accountability for the agency, and establish rules for termination of employment for IRS employees who commit certain acts or omissions. This was in response to an IRS that was completely out of control. The Ward case, which is a post you should pause to read, is a prime example of actions by the IRS leading up to 1998 that are shocking and conduct that is unbefitting of government employees.
RRA 98 covers a lot of different types of misconduct, but it does not include everything. The recent Wormley v. Department of the Treasury, 231 F. App’x 948 (Fed. Cir. 2007) provides an opportunity to consider these rules. The case questioned whether an IRS employee should be fired for biting off a portion of her neighbor’s thumb during a physical altercation, leading to her conviction for simple assault.
Facts & Procedural History
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 whereby she bit off a portion of her neighbors thumb, (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 IRS Revenue Restructuring Act
The IRS Restructuring and Reform Act of 1998 (“RRA 98”) is a United States law that reorganized and made significant changes to the IRS. RRA 98 was passed in response to public concerns about abuses by the IRS and aimed to improve taxpayer rights and service, while also providing more oversight and accountability for the IRS.
Some of the key provisions of the act include:
- Creation of the Office of the National Taxpayer Advocate: This office was established to assist taxpayers who are experiencing problems with the IRS, and to ensure that taxpayers are treated fairly and have access to information and assistance.
- Limits on IRS enforcement powers: The act limits the ability of the IRS to seize property without first obtaining a court order, and requires the agency to give taxpayers notice before seizing property. It also prohibits the use of unreasonable force or threats of force by IRS agents.
- Restrictions on IRS audits: The act requires the IRS to provide taxpayers with more notice and explanation before conducting audits, and establishes new rules to protect taxpayers from arbitrary or excessive audits.
- Increased taxpayer protections: The act provides for greater confidentiality of taxpayer information and establishes new penalties for IRS employees who misuse taxpayer information. It also establishes new procedures for resolving disputes between taxpayers and the IRS.
Overall, the IRS Restructuring and Reform Act of 1998 was intended to make the IRS more accountable to taxpayers and to address concerns about abuses and unfair treatment by the agency.
Many of the provisions of RRA 98 made their way into the tax code. Others are only found in the language of RRA 98. Section 1203 is an example.
Section 1203 Violations
Section 1203 of RRA 98 establishes the rules for termination of employment for misconduct by IRS employees. The law states that if an employee commits certain acts or omissions in the performance of their official duties and there is a final administrative or judicial determination of such an act, the IRS must terminate the employee’s employment.
The acts or omissions that may lead to termination, include:
- willful failure to obtain required approval signatures on documents authorizing the seizure of a taxpayer’s property,
- providing a false statement under oath with respect to a material matter involving a taxpayer,
- violating a taxpayer’s or employee’s civil rights or constitutional rights,
- falsifying or destroying documents to conceal mistakes made by an employee,
- assault or battery on a taxpayer or employee,
- violations of the Internal Revenue Code or IRS policies for the purpose of retaliating against or harassing a taxpayer or employee,
- willful misuse of taxpayer information, and
- threatening to audit a taxpayer for personal gain.
The law gives the IRS discretion to take a personnel action other than termination for an act or omission under and the ability to establish a procedure to determine whether an individual should be referred for such an action. The law also says that the IRS’s determination is final and cannot be appealed.
IRS Notice 99-27
The IRS issued Notice 99-27 to explain how Section 1203 is applied.
It should be noted that the assault by the IRS employee, in this case, would not be a Section 1203 violation, as the assault does not appear to be related to a taxpayer matter she was working on. Notice 99-27 has an example that addresses this:
Example 1. While at home after duty hours, an IRS employee becomes involved in a physical argument with his neighbor. The neighbor sues the employee for assault and battery and a court finds the employee liable for civil assault and battery. Is the agency mandated to terminate the employment of the employee pursuant to section 1203?
Answer. No. Section 1203 is triggered only with respect to acts or omissions committed in the performance of the employee’s official duties. Under the facts presented here, the IRS employee’s conduct was off-duty conduct having no connection to the IRS. Therefore, the civil judgment finding the employee liable for assault and battery on his neighbor would not fall under section 1203(b)(5). Additionally, the assault and battery was not “on a taxpayer, taxpayer representative, or other employee of the IRS,” as is required by section 1203(b)(5). See F. for a discussion of the meaning of taxpayer and taxpayer representative.
This does not mean that the conduct should not be reported to the IRS, however.
Reporting Section 1203 Violations
The IRS has also updated its policy manual, the Internal Revenue Manual, to explain how the IRS is to handle Section 1203 violations. These instructions help explain how taxpayers are to report Section 1203 violations.
IRM 126.96.36.199 says that:
Allegations determined to be potential section 1203 violations will be sent to Treasury Inspector General for Tax Administration (TIGTA) for processing and investigation, if required. See IRM 188.8.131.52, RRA98 Section 1203 – Employee Responsibilities.
Allegations determined to contain no section 1203 violations will be handled using administrative procedures. See IRM 184.108.40.206, Customer Complaints (Non – Section 1203 Violations).
Thus, taxpayers are to start with a complaint to TIGTA. TIGTA will then route the complaint to the IRS manager or advise the taxpayer to do so if there is possible misconduct that does not rise to the level of or involve a Section 1203 violation.
Complaints can be submitted to TIGTA online using this link.
The IRS Restructuring and Reform Act of 1998 was passed to reorganize and make significant changes to the IRS, with the aim of improving taxpayer rights and service, while also providing more oversight and accountability for the agency. Section 1203 of RRA 98 establishes the rules for termination of employment for misconduct by IRS employees, including willful misconduct and assault, among others. Despite the limitations of the law, taxpayers can still report any misconduct by an IRS employee to TIGTA for processing and investigation.