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IRS Rehiring Employees Terminated for Performance Reasons

2 min readBy: Joseph Bishop-Henchman

The Internal Revenue Service (IRS) rehired a bunch of employees it shouldn’t have, is how I read a newly released investigation by the Treasury Department Inspector General. Key findings:

  • The IRS rehired about 2,000 former employees between January 2015 and March 2016. Of those, 213 had been terminated for performance reasons. Four had been terminated due to not paying their taxes, four for unauthorized access of taxpayers’ accounts, 13 for falsifying documents, and six for misconduct (including one with several theft convictions and a felony conviction for possession of a forgery device).
  • The Inspector General previously did a report on this issue in December 2014, in which the IRS was provided a list of 824 employees who had been questionably rehired between 2010 and 2013. Sixty of these employees were rehired again by the IRS between 2015 and 2016. Of those 60, five have already been written up based on performance issues.
  • IRS hiring decision-makers do not have access to applicants’ IRS employment history records. The IRS says doing so would be cost-prohibitive, but the Inspector General concluded that the IRS never performed a cost-benefit analysis.
  • Twenty-seven of the rehired employees failed to disclose that they were previously terminated by the IRS, as required by the Declaration for Federal Employment form they filled out. The federal Office of Personnel Management (OPM) requires that all nondisclosures be referred to OPM for review, which the IRS did not do.

The Inspector General chose to highlight one startling example:

One former employee with a history of prior convictions, including petty theft, possession of a controlled substance, reckless driving, and prior absence without leave issues, applied for employment and was mistaken for a different applicant with a similar name that the IRS intended to hire. The IRS inadvertently sent the former employee instructions to report for duty and allowed the former employee to enter an IRS building. Once inside the building, the former employee completed paperwork and was sworn in as a Federal Government employee before IRS management identified the mistake. IRS management stated that because the former employee reported for work, was sworn in, and completed certain tasks, the former employee was paid for one day’s work.

This is pretty shocking stuff, even for the well-documented issues that the IRS has. It’s one thing if the IRS carefully evaluated why they terminated someone before and decided it was worth giving them a second chance. But here, the hiring managers didn’t even know the applicant was a past employee, let alone that they had been fired for performance reasons. So the IRS went ahead and hired and paid people who couldn’t do the work, wasting a lot of time and money.

In the report, the Inspector General notes that the IRS has agreed to implement recommendations to update its policies and practices and provide prior IRS employment history on applicants to hiring managers. Not that they had much choice.