[House Report 115-796]
[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-796
======================================================================
ENSURING INTEGRITY IN THE IRS WORKFORCE ACT OF 2018
_______
June 28, 2018.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following
R E P O R T
[To accompany H.R. 3500]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 3500) to amend the Internal Revenue Code of 1986 to
prohibit the Commissioner of the Internal Revenue Service from
rehiring any employee of the Internal Revenue Service who was
involuntarily separated from service for misconduct, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } } 115-796
======================================================================
ENSURING INTEGRITY IN THE IRS WORKFORCE ACT OF 2018
_______
June 28, 2018.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following
R E P O R T
[To accompany H.R. 3500]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 3500) to amend the Internal Revenue Code of 1986 to
prohibit the Internal Revenue Service from rehiring an employee
who was removed for misconduct or whose employment was
terminated for cause, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND............................................3
II. EXPLANATION OF THE BILL...........................................4
A. Prohibition on Rehiring Any Employee of the Internal
Revenue Service Who Was Involuntarily Separated from
Service for Misconduct (sec. 2 of the bill and sec.
7804 of the Code).................................... 4
III.VOTES OF THE COMMITTEE............................................6
IV. BUDGET EFFECTS OF THE BILL........................................6
A. Committee Estimate of Budgetary Effects............... 6
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority........................ 7
C. Cost Estimate Prepared by the Congressional Budget
Office............................................... 7
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE........8
A. Committee Oversight Findings and Recommendations...... 8
B. Statement of General Performance Goals and Objectives. 8
C. Information Relating to Unfunded Mandates............. 8
D. Applicability of House Rule XXI 5(b).................. 8
E. Tax Complexity Analysis............................... 8
F. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits.............................. 9
G. Duplication of Federal Programs....................... 9
H. Disclosure of Directed Rule Makings................... 9
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED.............9
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Ensuring Integrity in the IRS
Workforce Act of 2018''.
SEC. 2. PROHIBITION ON REHIRING ANY EMPLOYEE OF THE INTERNAL REVENUE
SERVICE WHO WAS INVOLUNTARILY SEPARATED FROM
SERVICE FOR MISCONDUCT.
(a) In General.--Section 7804 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:
``(d) Prohibition on Rehiring Employees Involuntarily Separated.--The
Commissioner may not hire any individual previously employed by the
Commissioner who was removed for misconduct under this subchapter or
chapter 43 or chapter 75 of title 5, United States Code, or whose
employment was terminated under section 1203 of the Internal Revenue
Service Restructuring and Reform Act of 1998 (26 U.S.C. 7804 note).''.
(b) Effective Date.--The amendment made by subsection (a) shall apply
with respect to the hiring of employees after the date of the enactment
of this Act.
SEC. 3. NO ADDITIONAL FUNDS AUTHORIZED.
No additional funds are authorized to carry out the requirements of
this Act and the amendments made by this Act. Such requirements shall
be carried out using amounts otherwise authorized.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 3500, as reported by the Committee on Ways
and Means, amends the Internal Revenue Code of 1986 (the Code)
to prohibit the Internal Revenue Service (IRS) from rehiring
any individual, previously employed by the agency, who was
removed for misconduct or was involuntarily separated for
cause.
B. Background and Need for Legislation
In February 2015, the Treasury Inspector General for Tax
Administration (TIGTA) reported that the IRS was repeatedly
rehiring former employees with well-documented conduct or
performance issues.\1\ In July 2017, TIGTA issued a second
report confirming again that the IRS was still rehiring
employees with significant conduct issues, such as unauthorized
access of taxpayer accounts and falsification of official
documents.\2\ Both reports identified hundreds of former
employees who were rehired by the IRS despite past misconduct.
American taxpayers have a right to expect that IRS employees
will be held to a high standard of conduct, especially when
they have access to sensitive taxpayer information. Rehiring
employees who were fired for misconduct puts taxpayers and the
IRS at increased risk for future problems. H.R. 3500 limits
that risk by preventing the IRS from rehiring employees who
have abused their positions and have had their employment with
the agency terminated.
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\1\Inspector General for Tax Administration, Department of the
Treasury, Additional Consideration of Prior Conduct and Performance
Issues is Needed When Hiring Former Employees (TIGTA 2015-10-006),
December 30, 2014, available at https://www.treasury.gov/tigta/
auditreports/2015reports/201510006fr.pdf.
\2\Inspector General for Tax Administration, Department of the
Treasury, The Internal Revenue Service Continues to Rehire Former
Employees with Conduct and Performance Issues (TIGTA 2017-10-035), July
24, 2017, available at https://www.treasury.gov/tigta/auditreports/
2017reports/201710035fr.pdf.
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C. Legislative History
Background
H.R. 3500 was introduced on July 27, 2017, and was referred
to the Committee on Ways and Means.
Committee action
The Committee on Ways and Means marked up H.R. 3500, the
``Ensuring Integrity in the IRS Workforce Act of 2018,'' on
June 21, 2018, and ordered the bill, as amended, favorably
reported (with a quorum being present).
Committee hearings
The need for improved IRS hiring practices and employee
conduct was discussed at an Oversight Subcommittee hearing on
the 2015 Tax Filing Season, April 22, 2015.
II. EXPLANATION OF THE BILL
A. Prohibition on Rehiring Any Employee of the Internal Revenue Service
Who Was Involuntarily Separated From Service for Misconduct (Sec. 2 of
the Bill and Sec. 7804 of the Code)
PRESENT LAW
Employees of the IRS are subject to rules governing Federal
employment generally\3\ as well as rules of conduct specific to
the Department of the Treasury and the IRS. Standards of
Ethical Conduct for Employees of the Executive Branch are
supplemented by additional rules applicable to employees of the
Department of the Treasury.\4\
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\3\Part III of Title 5 of the United States Code prescribes rules
for Federal employment, including employment, retention, and management
and employee issues.
\4\Standards of Ethical Conduct for Employees of the Executive
Branch, 5 C.F.R. 735. 5 CFR 3101, Supplemental Standards of Ethical
Conduct for Employees of the Department of the Treasury; 31 CFR Part 0,
Department of the Treasury Employee Rules of Conduct.
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The Code\5\ provides that the Commissioner of the IRS has
such duties and powers as prescribed by the Secretary. Unless
otherwise specified by the Secretary, such duties and powers
include the power to administer, manage, conduct, direct, and
supervise the execution and application of the internal revenue
laws or related statutes and tax conventions to which the
United States is a party, and to recommend to the President a
candidate for Chief Counsel (and recommend the removal of the
Chief Counsel). Unless otherwise specified by the Secretary,
the Commissioner is authorized to employ such persons as the
Commissioner deems proper for the administration and
enforcement of the internal revenue laws and is required to
issue all necessary directions, instructions, orders, and rules
applicable to such persons,\6\ including determination and
designation of posts of duty.
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\5\Sec. 7803(a).
\6\Sec. 7804.
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The IRS Restructuring and Reform Act of 1998 (the ``IRS
Reform Act'')\7\ requires the IRS to terminate an employee for
certain proven violations committed by the employee in
connection with the performance of official duties. The
violations include: (1) willful failure to obtain the required
approval signatures on documents authorizing the seizure of a
taxpayer's home, personal belongings, or business assets; (2)
providing a false statement under oath material to a matter
involving a taxpayer; (3) with respect to a taxpayer, taxpayer
representative, or other IRS employee, the violation of any
right under the U.S. Constitution, or any civil right
established under titles VI or VII of the Civil Rights Act of
1964, title IX of the Educational Amendments of 1972, the Age
Discrimination in Employment Act of 1967, the Age
Discrimination Act of 1975, sections 501 or 504 of the
Rehabilitation Act of 1973 and title I of the Americans with
Disabilities Act of 1990; (4) falsifying or destroying
documents to conceal mistakes made by any employee with respect
to a matter involving a taxpayer or a taxpayer representative;
(5) assault or battery on a taxpayer or other IRS employee, but
only if there is a criminal conviction or a final judgment by a
court in a civil case, with respect to the assault or battery;
(6) violations of the Internal Revenue Code, Treasury
Regulations, or policies of the IRS (including the Internal
Revenue Manual) for the purpose of retaliating against or
harassing a taxpayer or other IRS employee; (7) willful misuse
of section 6103 for the purpose of concealing data from a
Congressional inquiry; (8) willful failure to file any tax
return required under the Code on or before the due date
(including extensions) unless failure is due to reasonable
cause; (9) willful understatement of Federal tax liability,
unless such understatement is due to reasonable cause; and (10)
performing, delaying, or failing to perform (or threatening to
perform, delay, or fail to perform) any official action
(including any audit) with respect to a taxpayer for the
purpose of extracting personal gain or benefit or for a
political purpose.
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\7\Pub. L. No. 105-206, sec. 1203(b), July 22, 1998, as amended by
Pub. L. No. 108-357, title VIII, sec. 881(d), Oct. 22, 2004, and Pub.
L. No. 114-113, div. Q, title IV, sec. 407(a), Dec. 18, 2015.
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The IRS Reform Act provides non-delegable authority to the
Commissioner to determine that factors exist, that, in the
Commissioner's sole discretion, mitigate against terminating
the employee. The IRS Reform Act also provides that the
Commissioner, in his sole discretion, may establish a procedure
to determine whether an individual should be referred for such
a determination by the Commissioner. The Treasury Inspector
General for Tax Administration (``TIGTA'') is required to track
employee terminations and terminations that would have occurred
had the Commissioner not determined that there were mitigation
factors and include such information in the annual report to
Congress.
REASONS FOR CHANGE
The TIGTA reported in 2015 that the IRS had rehired 141
former employees who had previously been dismissed
involuntarily for cause.\8\ In 2017, the TIGTA reported a
similar finding that the IRS had rehired more than 300 former
employees with substantiated employment issues.\9\ The types of
misconduct that led to the involuntary dismissals included
willful failure to file tax returns, unauthorized access to
confidential tax information, falsification of official forms,
abuse of leave, and other violations of IRS policies. The
Committee believes that rehiring persons who were fired for
such misconduct is improper and poses a serious risk to the
confidentiality of the information entrusted to the IRS and
erodes trust in the IRS. In order to restore trust in the
integrity of IRS employees, and hold the IRS officials
accountable for their hiring practices, it is necessary to ban
rehiring persons who were dismissed for cause.
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\8\Inspector General for Tax Administration, Department of the
Treasury, Additional Consideration of Prior Conduct and Performance
Issues is Needed When Hiring Former Employees (TIGTA 2015-10-006),
December 30, 2014, available at https://www.treasury.gov/tigta/
auditreports/2015reports/201510006fr.pdf.
\9\Inspector General for Tax Administration, Department of the
Treasury, The Internal Revenue Service Continues to Rehire Former
Employees with Conduct and Performance Issues (TIGTA 2017-10-035), July
24, 2017, available at https://www.treasury.gov/tigta/auditreports/
2017reports/201710035fr.pdf.
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EXPLANATION OF PROVISION
The IRS may not hire any individual previously employed by
the IRS who was involuntarily separated due to misconduct under
subchapter A of Chapter 80 of the Code, under chapters 43 or 75
of title 5 of the United States Code, or under section 1203 of
the IRS Reform Act.
No additional funds are authorized to carry out the
requirements of the provision.
EFFECTIVE DATE
The provision is effective with respect to the hiring of
employees after the date of enactment.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the House of
Representatives, the following statement is made concerning the
vote of the Committee on Ways and Means during the markup
consideration of H.R. 3500, the ``Ensuring Integrity in the IRS
Workforce Act of 2018,'' on June 21, 2018.
The bill, H.R. 3500, as amended, was ordered favorably
reported to the House of Representatives by a voice vote (with
a quorum being present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 3500, as
reported.
The bill, as reported, is estimated to have a negligible
effect on Federal fiscal year budget receipts for the period
2018-2028.
Pursuant to clause 8 of rule XIII of the Rules of the House
of Representatives, the following statement is made by the
Joint Committee on Taxation with respect to the provisions of
the bill amending the Internal Revenue Code of 1986: The gross
budgetary effect (before incorporating macroeconomic effects)
in any fiscal year is less than 0.25 percent of the current
projected gross domestic product of the United States for that
fiscal year; therefore, the bill is not ``major legislation''
for purposes of requiring that the estimate include the
budgetary effects of changes in economic output, employment,
capital stock and other macroeconomic variables.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee further states that the bill involves no new tax
expenditure.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 25, 2018.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3500, the Ensuring
Integrity in the IRS Workforce Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 3500--Ensuring Integrity in the IRS Workforce Act of 2017
H.R. 3500 would amend federal law to prohibit the Internal
Revenue Service (IRS) from re-hiring employees who were fired
for misconduct. CBO estimates that implementing H.R. 3500 would
not have a significant cost over the next five years because it
would not change the agency's current employment procedures.
The staff of the Joint Committee on Taxation (JCT) estimate
that enacting H.R. 3500 would affect revenues over the 2018-
2028 period; therefore, pay-as-you-go procedures apply. However
those effects would be negligible. Enacting the bill would not
affect direct spending.
According to the IRS, H.R. 3500 largely would codify the
agency's current policies and practices. As recommended by the
Treasury Inspector General for Tax Administration, the IRS now
considers prior conduct and performance issues in the hiring
process.
CBO estimates that enacting H.R. 3500 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2029.
JCT has determined that H.R. 3500 contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was reviewed by Theresa Gullo, Assistant
Director for Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated into
the description portions of this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the bill and states that the bill does not
involve any Federal income tax rate increases within the
meaning of the rule.
E. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service
Restructuring and Reform Act of 1998 (``IRS Reform Act'')
requires the staff of the Joint Committee on Taxation (in
consultation with the Internal Revenue Service and the Treasury
Department) to provide a tax complexity analysis. The
complexity analysis is required for all legislation reported by
the Senate Committee on Finance, the House Committee on Ways
and Means, or any committee of conference if the legislation
includes a provision that directly or indirectly amends the
Internal Revenue Code of 1986 and has widespread applicability
to individuals or small businesses.
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
House of Representatives, the staff of the Joint Committee on
Taxation has determined that a complexity analysis is not
required under section 4022(b) of the IRS Reform Act because
the bill contains no provisions that amend the Internal Revenue
Code of 1986 and that have ``widespread applicability'' to
individuals or small businesses, within the meaning of the
rule.
F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
G. Duplication of Federal Programs
In compliance with Sec. 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program, (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139, or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to section 6104 of
title 31, United States Code.
H. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (115th Congress),
the following statement is made concerning directed rule
makings: The Committee advises that the bill requires no
directed rule makings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle F--Procedure and Administration
* * * * * * *
CHAPTER 80--GENERAL RULES
* * * * * * *
Subchapter A--Application of Internal Revenue Laws
* * * * * * *
SEC. 7804. OTHER PERSONNEL.
(a) Appointment and Supervision.--Unless otherwise prescribed
by the Secretary, the Commissioner of Internal Revenue is
authorized to employ such number of persons as the Commissioner
deems proper for the administration and enforcement of the
internal revenue laws, and the Commissioner shall issue all
necessary directions, instructions, orders, and rules
applicable to such persons.
(b) Posts of Duty of Employees in Field Service or
Traveling.--Unless otherwise prescribed by the Secretary--
(1) Designation of post of duty.--The Commissioner
shall determine and designate the posts of duty of all
such persons engaged in field work or traveling on
official business outside of the District of Columbia.
(2) Detail of personnel from field service.--The
Commissioner may order any such person engaged in field
work to duty in the District of Columbia, for such
periods as the Commissioner may prescribe, and to any
designated post of duty outside the District of
Columbia upon the completion of such duty.
(c) Delinquent Internal Revenue Officers and Employees.--If
any officer or employee of the Treasury Department acting in
connection with the internal revenue laws fails to account for
and pay over any amount of money or property collected or
received by him in connection with the internal revenue laws,
the Secretary shall issue notice and demand to such officer or
employee for payment of the amount which he failed to account
for and pay over, and, upon failure to pay the amount demanded
within the time specified in such notice, the amount so
demanded shall be deemed imposed upon such officer or employee
and assessed upon the date of such notice and demand, and the
provisions of chapter 64 and all other provisions of law
relating to the collection of assessed taxes shall be
applicable in respect of such amount.
(d) Prohibition on Rehiring Employees Involuntarily
Separated.--The Commissioner may not hire any individual
previously employed by the Commissioner who was removed for
misconduct under this subchapter or chapter 43 or chapter 75 of
title 5, United States Code, or whose employment was terminated
under section 1203 of the Internal Revenue Service
Restructuring and Reform Act of 1998 (26 U.S.C. 7804 note).
* * * * * * *
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