Federal Manager's Daily Report

The IRS uses different standards when conducting checks of tax compliance for federal employees, including examining less information when looking into its own employees and employees of its contractors than it does when examining employees and contractors of other agencies, an IG report has said.

For employees, IRS conducts such checks for reasons including suitability determinations for job applicants and when employees are up for various types of awards and bonuses, a report said.


However, it found for example that when conducting checks on prospective employees and contractor employees of other agencies, steps include checks of 1040 forms and employment and excise taxes covering four to six years; however, when checking its own prospective employees and contractor employees, it examines only 1040s and only going back three years.

IRS officials attributed the differences to “lack of sufficient coordination when implementing tax check standards among various IRS business units.”

Said the auditors, “Until the standards are made consistent, the IRS could potentially hire an individual with outstanding federal tax liability related to excise and employment taxes. Hiring federal employees or contractor employees with tax debt or tax filing issues is contrary to the IRS’s mission to ensure compliance with tax laws. Additionally, taxpayers may be treated differently when applying for a job with another Federal agency, which represents inequitable treatment. most likely contributed to the current difference in criteria used to determine tax compliance.”

It added, though, that the IRS is aware of the issue and has “made progress in achieving consensus across responsible business units to align the definitions of tax return filing criteria and tax payment criteria in an effort to eliminate existing differences in the suitability tax checks.”

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