Tee Time on Taxpayers’ Dime: IRS Employee Golfing on the Job

Published Categorized as IRS Misconduct & Disclosure, Tax Procedure
IRS employee discipline

The IRS cannot simply terminate employees as private-sector employers can. IRS employees are often shielded by complex bureaucratic processes that makes it difficult to remove them from their positions.

The recent case of Sheiman v. Department of the Treasury, No. 2022-2045 (Fed. Cir. 2024), provides an opportunity to consider the IRS’s challenges in terminating an employee, even when it believes it has conclusive evidence of intentional employee misconduct. The case centers around an employee who allegedly spent seven years playing golf on the job instead of performing his duties for the IRS.

This case and others like it are relevant for readers of this website, as the end product of poor IRS employee conduct usually impacts taxpayers and their cases. Taxpayers are the ones who have to live with the consequences of cases that are either neglected or mishandled by less-than-diligent IRS employees.

Facts & Procedural History

Michael E. Sheiman was a GS-13 Senior Appraiser for the IRS. IRS appeasers handle an number of different types of tax cases, ranging from conservation easements to estate and gift tax cases.

This is a position that generally pays an annual salary of around $100,000 along with comprehensive health benefits and other employee perks that often surpass those available in the private sector.

In September 2011, the IRS received an anonymous letter alleging that Sheiman was abusing his remote work arrangement by “golfing in the early afternoons during the work week.” This tip triggered an investigation by the Treasury Inspector General for Tax Administration (“TIGTA”) that spanned from September 2011 to February 2014.

The four-year investigation reportedly uncovered that between August 2006 and August 2013, an eight year period, Sheiman “golfed during official IRS duty hours on at least 205 days for which he claimed no annual leave on his official IRS timesheets.” On 30 of those days, Sheiman allegedly took paid sick leave despite not being ill.

It wasn’t until October 2014, more than three years after the initial anonymous complaint, that the agency finally issued Sheiman a notice proposing his removal based on charges of providing false and misleading information on his time and attendance records. Sheiman was officially terminated effective February 2015.

Sheiman appealed his removal to the Merit Systems Protection Board (“MSPB”). After a hearing, an administrative judge reduced the removal to a mere 30-day suspension. Presumably, Sheiman went back to work for the IRS during this time.

The full MSPB Board, on petition for review, reversed the administrative judge’s decision and upheld Sheiman’s removal. Sheiman then filed a petition with the Federal Circuit Court of Appeals, resulting in the current court decision.

Falsification vs Misleading Information Charges

The IRS raised two issues in Sheiman’s case, namely, (1) providing false information on time and attendance records, and (2) providing misleading information on time and attendance records.

The MSPB administrative judge ruled that the IRS did not sufficiently prove the falsification charge, as it failed to demonstrate that Sheiman intended to deceive the IRS when completing his time records. Throughout the proceedings, Sheiman maintained that he believed he had the flexibility to golf during the day as long as he worked his required 8 hours per day and 40 hours per week. The full Board upheld this finding on appeal.

The Board did sustain the IRS on the issue of providing misleading information. It found that on 8 occasions, Sheiman took 8 hours of sick leave but played golf instead. The Board determined that Sheiman “knew or should have known that paid sick leave was for illness or medical treatment, not for engaging in a recreational activity or sport such as golfing.”

Violation of Public Trust

The Board and later the court focused on the public trust aspect of the case.

As an IRS employee, Sheiman was in a position of public trust. This was especially true given his role as a senior appraiser for the IRS, which entails significant responsibilities and interaction with the public on tax cases.

The Board emphasized that Sheiman’s remote work arrangement made was such that he had to accurately report his time and attendance, as he was not under direct in-person supervision. The lack of candor he demonstrated in using sick leave to play golf was a serious breach of the trust placed in him as a public servant.

IRS management asserted that Sheiman’s misconduct caused him to lose confidence in Sheiman’s ability to perform his duties with integrity. The Board considered this loss of trust a notably aggravating factor in determining the appropriate penalty.

Moreover, the Board noted the importance of maintaining public confidence in the IRS. As an agency that relies on the voluntary compliance of taxpayers, the IRS must be seen as operating with the utmost integrity. Misconduct by IRS employees like Sheiman’s alleged misuse of sick leave for personal recreation risks severely undermining public trust in the agency.

Reasonableness of Penalty

IRS management originally determined that removal was the appropriate penalty for each of the issues it raised. However, the administrative judge did not sustain the falsification issue and reduced the penalty to a 30-day suspension.

Upon review, the full Board found the administrative judge erred in revisiting the penalty determination. It emphasized that lack of candor offenses are serious and warranted removal, particularly considering the high degree of trust required by Sheiman’s remote position. The Board also faulted the judge for not giving sufficient weight to Sheiman’s lack of remorse or admission of wrongdoing regarding his misuse of sick leave.

Ultimately, the Federal Circuit affirmed the MSPB’s decision, finding no reversible error in the Board’s analysis upholding Sheiman’s removal from employment based solely on the issue of providing misleading information.

The IRS’s Disciplinary Process

The Sheiman case illustrates the IRS’s multi-step disciplinary process for employee misconduct. Here is a review of the steps in this case:

  1. Investigation: When allegations of misconduct arise, either from internal sources or tips from the public, the IRS initiates an investigation, often conducted by the TIGTA. The investigation gathers evidence to substantiate the claims against the employee. In Sheiman’s case, this investigation lasted nearly four years.
  2. Proposal Notice: If the investigation finds sufficient evidence of misconduct, the agency issues a formal notice proposing disciplinary action, such as removal. The employee is given an opportunity to respond to the charges. Here, the IRS proposed Sheiman’s removal in October 2014.
  3. Decision: After considering the evidence and the employee’s response, the IRS issues a final decision on the disciplinary action. Sheiman was officially terminated by the IRS in February 2015.
  4. Appeal to MSPB: Most federal employees have the right to appeal serious disciplinary actions, like removal, to the MSPB. An administrative judge conducts a hearing and issues an initial decision. In Sheiman’s case, the judge mitigated the removal to a 30-day suspension.
  5. Petition for Review: Either party may petition the full MSPB to review the administrative judge’s initial decision. Here, the Board reversed the judge’s mitigation and sustained Sheiman’s removal.
  6. Judicial Review: As a final step, the employee may seek review of the MSPB’s decision in federal court. Sheiman appealed to the Federal Circuit, which affirmed his removal.

While designed to provide due process, this lengthy multi-step procedure can significantly delay the implementation of discipline and removal of problem employees. There is little an IRS manager can do, even when he or she knows that taxpayers are being negatively impacted by the personnel issue.

Impact on IRS Decision-Making

Beyond the specific misconduct that alleged in this case, the Sheiman case highlights the concerns about the quality and impartiality of decisions made by IRS front-line employees.

When an employee like Sheiman can spend years playing golf on the job without consequence for many years, with apparently no or little management oversight, it calls into question the level of care and attention given to the cases he was assigned to work. If an IRS manager isn’t even checking on attendance, one can’t help but wonder if the same manager was checking the quality of his substantive work.

If true, misconduct such as Sheiman’s could lead to bad decisions on taxpayer cases for a variety of reasons. An employee who is disengaged from their work and more focused on personal leisure activities may lack the diligence and thoroughness needed to properly review and analyze case facts. They may take shortcuts or make hasty determinations to free up more time for their outside interests.

In other cases, absentee employees may shift work to the good and dutiful IRS employees–who in turn have to do something to make cases progress and deal with their increased workload, which no doubt results in bad decisions by the good and dutiful employees.

Moreover, an employee who is brazenly violating the rules and betraying the public trust may have little regard for rendering fair and equitable decisions. One can envision an IRS appraiser simply rendering cursory decisions over and over with little thought or concern for the impact the decisions have on taxpayers. This erodes confidence in the impartiality and accuracy of IRS’s substantive tax determinations.

The Takeaway

The Sheiman case shows how flawed the system is. Issues within the IRS’s personnel management and disciplinary processes can linger for years. This is true even when the IRS believes that its employee is engaging in flagrant and intentional misconduct. The years of appeals required to reach this conclusion are inexcusable–particularly since it is the taxpayers whose cases are under the care and direction of these IRS employees who have to suffer the consequences.

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