|
http://www.treas.gov/tigta/
You can submit your complaint by these
methods:
Micsonduct Complaint by Email:
Complaints@tigta.treas.gov
Misconduct Complaint By Phone:
Call toll free: 1-800-366-4484
Misconduct Comprlaint By Fax:
(202) 927-7018
Misconduct Complaint By Mail:
Treasury Inspector General for Tax Administration
Hotline
P.O. Box 589
Ben Frank
lin
Station
Washington, DC 20044-0589
To obtain copies of audit reports, semiannual reports and other TIG Liaisons at
(202) 622-6500
or visit our web site at: http://www.treas.gov/tigta/
What kinds of things should you report?
-
Mismanagement or violations of law, rules, or regulations by the
IRS
employees
-
Mismanagement or violations of law, rules, or regulations by the TIGTA
employees or contractors.
Your complaint will be kept confidential if it is received on the phone, through
the mail, or in person. We cannot guarantee confidentiality if you send your
complaint via the online form or e-mail.
Laws protect you from reprisals (any action taken against you because
you filed this complaint).
Sec. 7214. Offenses by officers and
employees of the United States
(a) Unlawful acts of revenue
officers or agents
Any officer or
employee of the United States
acting in connection
with any revenue law of the United States
-
(1)
who is guilty of any extortion or willful oppression under color of law; or
(2)
who knowingly demands other or greater sums than are authorized by law, or
receives any fee, compensation, or reward, except as by law prescribed, for the
performance of any duty; or
(3)
who with intent to defeat the application of any provision of this title fails
to perform any of the duties of his office or employment; or
(4)
who conspires or colludes with any other person to defraud the United States
; or
(5)
who knowingly makes opportunity for any person to defraud the United States
; or
(6)
who does or omits to do any act with intent to enable any other person to
defraud the United States
; or
(7)
who makes or signs any fraudulent entry in any book, or makes or signs any
fraudulent certificate, return, or statement; or
(8)
who, having knowledge or information of the violation of any revenue law by any
person, or of fraud committed by any person against the United States under any
revenue law, fails to report, in writing, such knowledge or information to the
Secretary; or
(9)
who demands, or accepts, or attempts to collect, directly or indirectly as
payment or gift, or otherwise, any sum of money or other thing of value for the
compromise, adjustment, or settlement of any charge or complaint for any
violation or alleged violation of law, except as expressly authorized by law so
to do; shall be dismissed from office or discharged from employment and,
upon conviction thereof, shall be fined not more than $10,000, or imprisoned
not more than 5 years, or both. The court may in its discretion award out of
the fine so imposed an amount, not in excess of one-half thereof, for the use
of the informer, if any,who shall be ascertained by the judgment of the court.
The court also shall render judgment against the said officer or employee for
the amount of damages sustained in favor of the party injured, to be collected
by execution.
(b) Interest of internal
revenue officer or employee in tobacco or liquor production Any internal
revenue officer or employee interested, directly or indirectly, in the
manufacture of tobacco, snuff, or cigarettes, or in the production,
rectification, or redistillation of distilled spirits, shall be dismissed from
office; and each such officer or employee so interested in any such manufacture
or production, rectification, or redistillation or production of fermented
liquors shall be fined not more than $5,000.
(c) Cross reference
For penalty on collecting or disbursing officers trading in public funds or
debts of property, see 18 U.S.C. 1901.
-SOURCE- Aug. 16, 19
54, ch. 736, 68A Stat. 856; Pub. L. 85-859,
title II,Sec. 204(5), Sept. 2, 19
58, 72 Stat. 1429; Pub.
L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976
, 90 Stat. 1834.)
------------------------------------------------------------------------------------
ACT SEC . 1203 of the Internal Revenue Service
Restructuring and Reform Act of 1998 - TERMINATION OF EMPLOYMENT FOR
MISCONDUCT.
(a) IN GENERAL.--Subject
to subsection (c), the Commissioner of Internal Revenue shall terminate the employment of any employee of the Internal
Revenue Service if there is a final administrative or judicial determination
that such employee committed any act or omission described under subsection (b)
in the performance of the employee's official duties. Such termination shall be
a removal for cause on charges of misconduct.
(b) ACTS OR
OMISSIONS.--The acts or omissions referred to under subsection (a) are--
(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 with
respect to a material matter involving a taxpayer or taxpayer representative;
(3) with respect to a taxpayer, taxpayer
representative, or other employee of the Internal Revenue Service, the violation
of--
(A) any right under the Constitution of the United States
; or
(B) any civil right established under--
(i) title VI or VII
of the Civil Rights Act
of 1964;
(ii) title IX of the Education Amendments of
1972;
(iii) the Age Discrimination in Employment Act
of 1967;
(iv) the Age Discrimination Act of 1975;
(v) section 501 or 504 of the Rehabilitation Act
of 1973; or
(vi) 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 taxpayer representative;
(5) assault or battery on a taxpayer, taxpayer
representative, or other employee of the Internal Revenue Service, 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 of 1986, Department
of Treasury regulations, or policies of the Internal Revenue Service (including
the Internal Revenue Manual) for the purpose of retaliating against, or
harassing, a taxpayer, taxpayer representative, or other employee of the
Internal Revenue Service;
(7) willful misuse of the provisions of section
6103 of the Internal Revenue Code of 1986 for the purpose of concealing
information from a congressional inquiry;
(8) willful failure to file any return of tax
required under the Internal Revenue Code of 1986 on or before the date
prescribed therefor (including any extensions), unless such failure is due to
reasonable cause and not to willful neglect;
(9) willful understatement of Federal tax
liability, unless such understatement is due to reasonable cause and not to
willful neglect; and
(10) threatening to audit a taxpayer for the
purpose of extracting personal gain or benefit.
(c) DETERMINATION OF
COMMISSIONER.--
(1) IN GENERAL.--The Commissioner of Internal
Revenue may take a personnel action other than termination for an act or
omission under subsection (a).
(2) DISCRETION.--The exercise of authority under
paragraph (1) shall be at the sole discretion of the Commissioner of Internal
Revenue and may not be delegated to any other officer. The Commissioner of
Internal Revenue, in his sole discretion, may establish a procedure which will
be used to determine whether an individual should be referred to the
Commissioner of Internal Revenue for a determination by the Commissioner under
paragraph (1).
(3) NO APPEAL.--Any determination of the
Commissioner of Internal Revenue under this subsection may not be appealed in
any administrative or judicial proceeding.
(d) DEFINITION.--For
purposes of the provisions described in clauses (i), (ii), and (iv) of
subsection (b)(3)(B), references to a program or activity receiving Federal
financial assistance or an education program or activity receiving Federal
financial assistance shall include any program or activity conducted by the
Internal Revenue Service for a taxpayer.
Section 4303 of Title 5,
United States Code, authorizes an agency to remove an employee for
"unacceptable performance," as defined in Section 4301 of Title 5. In
addition, Section 7513 of Title 5 authorizes an agency to discipline an
employee (by applying specified sanctions ranging from furlough to removal, as
set forth in Section 7512) only for such cause as will promote the efficiency
of the IRS
. In general, the courts have interpreted this
provision to require a showing that (1) the employee is engaged in misconduct
and (2) there is a connection between such misconduct and the efficiency of the
service. See, King v. Frazier
,
CA
-DC, 77 F.3d 1361.
However, the decision regarding whether to take, and the form of, any
disciplinary action is largely left up to the particular agency.
Under
both of these provisions, employees subject to removal are generally entitled
to certain procedural safeguards including advance written notice, a hearing
and a right of appeal.
IRS
Restructuring and Reform Impact
Acts requiring
termination.--The IRS
must terminate an
employee (absent direct intervention by the IRS
Commissioner as
explained below) if there is a final administrative or judicial determination
that, in the course of his or her official duties, the employee:
(1) willfully failed to obtain the required
approval signatures on documents authorizing the seizure of a taxpayer's home,
personal belongings, or business assets;
(2) provided a false statement under oath with
respect to a material matter involving a taxpayer or a taxpayer representative;
(3) violated the rights of a taxpayer, taxpayer
representative or other employee of the IRS
under the U.S.
Constitution or under specified civil rights acts (see below);
(4) falsified or destroyed documents to conceal
mistakes made by any employee with regard to a matter involving a taxpayer or
taxpayer representative;
(5) assaulted or battered a taxpayer, taxpayer
representative or other employee of the IRS
, but only if there is
a criminal conviction or a final civil judgment to that effect;
(6) violated the 1986 Code, Treasury
regulations, or IRS
policies (including the
IRS
Manual) for the purpose of retaliating against
or harassing a taxpayer or other employee of the IRS
;
(7) willfully misused the provisions of
Code Sec. 6103 (regarding confidentiality of returns and return
information) for the purpose of concealing information from congressional
inquiry;
(8) willfully failed to file any tax return
required under the Code on or before the required date, unless the failure is
due to reasonable cause and not willful neglect;
(9) willfully understated federal tax liability,
unless such understatement is due to reasonable cause and not willful neglect;
or
(10) threatened to audit a taxpayer for the
purpose of extracting personal gain or benefit (Act Sec. 1203(a) and (b) of the
IRS
Restructuring and Reform Act of 1998).
An employee who is
terminated for any of the foregoing reasons will be considered removed for
cause on charges of misconduct (Act Sec. 1203(a) of the 1998 Act).
The Conference Committee
expanded paragraph (3) above to include constitutional violations in addition
to violations of civil rights. Moreover, the prohibition against civil rights
violations was clarified by reference to the following laws:
(i) Title VI or VII
of the Civil Rights Act
of 1964;
(ii) Title IX of the Education Amendments of
1972;
(iii) the Age Discrimination in Employment Act
of 1967;
(iv) the Age Discrimination Act of 1975;
(v) Section 501 or 504 of the Rehabilitation Act
of 1973; or
(vi) Title I of the Americans with Disabilities
Act of 1990.
The Act also makes it
clear that, for purposes of the provisions described in (i), (ii) and (iv)
above, references to a program or activity receiving federal financial
assistance or an education program or activity receiving federal financial
assistance includes any IRS
program or activity
conducted for a taxpayer (Act Sec. 1203(d) of the 1998 Act).
Discretion of the Commissioner.--As an additional
safeguard, the Commissioner may decide to take a personnel action other than
mandatory termination (Act Sec. 1203(c) of the 1998 Act). According to the
Senate Finance Committee report, the purpose of this exception is to allow the
Commissioner to take into account any mitigating factors. However, such a
decision is at the sole discretion of the Commissioner and may not be delegated
to any other officer. Moreover, the Commissioner's decision on this matter is
final and may not be appealed in any administrative or judicial proceeding
(Sec. 1203(c)(3) of the 1998 Act).
Act Sec. 1203. IRS personnel flexibilities
(termination of employment for misconduct)
Senate Committee Report (S. REP . NO. 105-174)
Present Law
The IRS
is subject to the
personnel rules and procedures set forth in title 5, United States Code. Under
these rules, IRS
employees generally are classified under the
General Schedule or the Senior Executive Service.
Reasons for Change
The Committee believes
that as part of restructuring the IRS
, the Commissioner
should have the ability to bring in experts and the flexibility to revitalize
the current IRS
workforce. The current hiring practices often
inhibit the ability of the Commissioner to change the IRS
' institutional
culture. Commissioner Rossotti has indicated that in order to maximize efforts
to transform the IRS
into an efficient,
modern and responsive agency, the ability to recruit and retain a top-notch
leadership and technical team is critical.
The Committee believes
the IRS
needs the flexibility to recruit employees from
the private sector, to redesign its salary and incentive structures to reward
employees who meet their objectives, and to hold non-performers accountable.
Personnel and pay flexibilities are necessary prerequisites for larger
fundamental changes in the IRS
.
The Committee wants to
support the Commissioner's initiatives to reposition the current IRS
workforce as part of
implementing a new organization designed around the needs of taxpayers.
Explanation of Provision
*
* *
Violations for which IRS employees may be
terminated
The bill 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) 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)
falsifying or destroying documents to avoid uncovering mistakes made by the
employee with respect to a matter involving a taxpayer; (4) assault or battery
on a taxpayer or other IRS
employee; (5) violation
of the civil rights of a taxpayer or other IRS
employee; (6) violations
of the Internal Revenue Code, Treasury Regulations, or policies of the IRS (including the Internal
Revenue Manual) for the purpose of retaliating or harassing a taxpayer or other
IRS employee; and (7) wilful misuse of section 6103 for
the purpose of concealing data from a Congressional inquiry.
The bill provides
non-delegable authority to the Commissioner to determine that mitigating
factors exist, that, in the Commissioner's sole discretion, mitigate against
terminating the employee. The bill also provides that the Commissioner, in his
sole discretion, may establish a procedure which will be used to determine
whether an individual should be referred for such a determination by the
Commissioner. The Treasury IG 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 IG's annual
report.
*
* *
Effective Date
The provision, other
than the IRS
employee training program provision, is
effective on the date of enactment. * * *
Senate Floor Debate for Amendment No. 2376 (144 CONG. REC. 56,
S4486)
* * * Mr. GRAMM.--* * *
Basically, we have in the bill a list of offenses for which an employee of the
Internal Revenue Service may be terminated. In light of concerns that have
arisen since we had the bill before the committee. I want to add two offenses
to the list.
One has to do with
testimony we heard where members of the Internal Revenue Service were said to
be threatening to audit people for personal gain. We heard an assertion that a
police officer had stopped an IRS
agent and was going to
write him a ticket, and the IRS
agent allegedly had
told the officer that if he wrote the ticket, he was going to get audited.
The second provision has
to do with a knowing and willful failure of an IRS
agent to file a tax
return or pay taxes or declare income. Both of these fit, I think, perfectly
into the list of very strong offenses that we have in the bill. * * *
Mr. KERRY.--Mr.
President, the National Restructuring Commission included this provision in our
bill. It is in the House bill, or at least provisions in it that dictate that
an employee who does a number of things would be automatically terminated.
What the Senator from Texas
has done is identified
some additional things that ought to be on the list and once again has
carefully drawn it--I believe the language is "willful" and--what was
the other word, I ask the Senator? "Willful" and
"intentionally."
This would not be a
situation where an individual accidentally underpays taxes or misses a deadline
or something like that. This is a much higher standard, a much more difficult
standard. And I think it is a quite reasonable provision to add to the list of
things that would force and require automatic termination.
In general, this
legislation is attempting to change the culture by saying here are some things
that, if you do it, there are going to be severe penalties. This is obviously a
severe penalty. Punitive damages for damages, we have an expanded right for
legal fees.
What we are trying to do
is change the culture so that there is a new seriousness given to actions taken
by the IRS
. And all of us understand the penalty needs to
be sufficient to meet the offense. I think the amendment of the distinguished
Senator from Texas
is a reasonable one and
I urge its adoption.
*
* *
Conference Committee Report (H.R. CONF. REP . NO. 105-599)
Senate Amendment
*
* *
Mandatory employee
terminations
The Senate amendment
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) 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) falsifying or destroying
documents to avoid uncovering mistakes made by the employee with respect to a
matter involving a taxpayer; (4) assault or battery on a taxpayer or other IRS
employee; (5) violation
of the civil rights of a taxpayer or other IRS
employee; (6)
violations of the Internal Revenue Code, Treasury Regulations, or policies of
the IRS (including the Internal Revenue Manual)
for the purpose of retaliating 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) threatening to audit a taxpayer for the
purpose of extracting personal gain or benefit.
The Senate amendment
provides non-delegable authority to the Commissioner to determine that
mitigating factors exist, that, in the Commissioner's sole discretion, mitigate
against terminating the employee. The Senate amendment also provides that the
Commissioner, in his sole discretion, may establish a procedure which will be
used to determine whether an individual should be referred for such a
determination by the Commissioner. The Treasury IG 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 IG's annual report.
*
* *
Conference Agreement
The conference agreement
follows the Senate amendment, with modifications. * * *
With respect to
mandatory terminations of employees for certain proven violations committed by
the employee in connection with the performance of official duties, the
conference agreement modifies the definitions of some of the violations. The
definitions of the other violations are the same as the Senate amendment. The
modified definitions are: (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) 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; (3) falsifying or destroying documents
to conceal mistakes made by any employee with respect to a matter involving a
taxpayer or taxpayer representative; and (4) 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.
*
* *
Act Sec. 3701. Cataloging complaints
House Committee Report (H.R. REP . NO. 105-364, pt. 1)
[Act Sec. 3701]
Present Law
The IRS
is required to make an
annual report to the Congress, beginning in 1997, on all categories of instances
involving allegations Of misconduct by IRS
employees, arising
either from internally identified cases or from taxpayer or third-party
initiated complaints. 44 The report must identify the nature of
the misconduct or complaint, the number of instances received by category, and
the disposition of the complaints.
Reasons for Change
The Committee believes
that all allegations of misconduct by IRS
employees must be
carefully investigated. The Committee also believes that the annual report to
Congress will help develop a public perception that the IRS
takes such allegations
of misconduct seriously. The Committee is concerned that, in the absence of
records detailing taxpayer complaints of misconduct on an individual employee
basis, the IRS
will not be able to adequately investigate such
allegations or properly prepare the required report.
Explanation of Provision
The bill requires that,
in collecting data for this report, records of taxpayer complaints of  misconduct by IRS
employees shall be
maintained on an individual employee basis. These individual records are not to
be listed in the report, but they will be useful in preparing the report. The
Committee intends that these records be used in evaluating individual
employees.
Effective Date
The requirement is
effective on the date of enactment.
Conference Committee Report (H.R. CONF. REP . NO. 105-599)
Senate Amendment
Same as the House bill.
Conference Agreement
The conference agreement
follows the House bill and the Senate amendment.
Effective Date
January 1, 2000
.
Records
of Taxpayer Complaints
Background
The IRS
is required to make an
annual report to the House Ways
and Means Committee and
the Senate Finance Committee on all instances involving allegations of
misconduct by IRS
employees. This requirement was instituted in
1996 by the Taxpayer Bill of Rights 2 (P.L. 104-168, Act Sec. 1211). The report
must identify categories of any misconduct allegations during the past year,
the number of instances in each category, and the disposition during the year
of any complaints, regardless of when the misconduct occurred. The report
covers misconduct identified internally by the IRS
as well as cases
arising from taxpayer or third-party complaints.
The IRS
has not been required
to record allegations of misconduct against particular employees. In order to
increase the public perception that the IRS
is taking allegations
of misconduct seriously, the House Committee Report for the IRS
Restructuring and
Reform Bill suggested requiring personnel details to be recorded. In the
absence of records containing details about taxpayer complaints of misconduct
against individual employees, the IRS
would not be able to
adequately investigate the allegations or properly prepare its report to
Congress.
IRS
Restructuring and Reform Impact
Records of complaints
against individual IRS employees.--In collecting data for the
IRS
's annual report to Congress on allegations of IRS
employee misconduct,
the IRS
is required to maintain records of taxpayer
complaints on an individual-employee basis (Act Sec. 3701 of the IRS
Restructuring and
Reform Act of 1998). According to the House Committee Report, individual
records are not to be listed in the IRS's annual report to Congress on
instances of employee misconduct (this report is required by Act Sec. 1211 of
the Taxpayer Bill of Rights 2, P.L. 104-168). However, according to the House
Committee Report, records of misconduct relating to individual IRS
employees are to be
used in evaluating individual employee performance.
* Effective
date.
No specific effective date is provided by the Act. The provision is, therefore,
considered effective on July
22, 1998
, the date of enactment. Individual records must be maintained
beginning not later than January
1, 2000
.
ACT SEC . 3701. CATALOGING
COMPLAINTS.
In collecting data for
the report required under section 1211 of Taxpayer Bill of Rights 2 (Public Law
104-168), the Secretary of the Treasury or the Secretary's delegate shall, not
later than January 1, 2000
, maintain records of
taxpayer complaints of misconduct by Internal Revenue Service employees on an
individual employee basis.
*
* *
Disclosure of Return Information by Whistle-Blowers
Background
The IRS
is required to disclose
taxpayer return information to the Chair of the Senate Finance Committee, House
Ways and Means Committee, or Joint Committee on Taxation upon written request
from the Chair (Code Sec. 6103(f)(1) ). Information that
directly or indirectly identifies a particular taxpayer may only be furnished
to a committee sitting in closed session, unless the taxpayer consents in
writing to making the information available in open committee meetings.
There was no avenue for
average IRS
employees to reveal return information in the
course of reporting misconduct or taxpayer abuse to a congressional committee.
One consequence of this rule was that employees were prevented by the taxpayer
confidentiality provisions from reporting suspected politically motivated
audits to the tax-writing committees, or from responding to congressional
allegations that particular audits were politically motivated.
Testimony in IRS
oversight hearings on
abusive IRS
management practices revealed several instances
in which whistle-blowers faced retaliation for reporting managerial misconduct
( CCH
Tax Day Reports, May 1, 1998
). In light of these allegations, increased
protection for whistle-blowers was deemed desirable.
IRS
Restructuring and Reform
Impact
Disclosures in the
course of alleging IRS employee misconduct or
taxpayer abuse.--Any person with current or prior authorized access to taxpayer
return information is permitted to disclose the information in the course of
reporting IRS
employee misconduct or taxpayer abuse to the
House Ways and Means Committee, the Senate Finance Committee, or the Joint
Committee on Taxation (Code Sec. 6103(f)(5) , as added by the IRS
Restructuring and
Reform Act of 1998). Whistle-blower information may also be disclosed to any
agents of these congressional committees or agents of the Chief of Staff of the
Joint Committee on Taxation who are authorized to inspect return information
under Code Sec. 6103(f)(4)(A) . Disclosure is
permissible if the person believes that the return information being disclosed
may be related to possible misconduct, maladministration, or taxpayer abuse.
Written approval from the committee chair is not needed prior to the
disclosure.
* Effective
date.
The provision is effective on July
22, 1998
(Act Sec. 3708(b) of the IRS
Restructuring and
Reform Act of 1998).
Records of Taxpayer Complaints
Background
The IRS
is required to make an
annual report to the House Ways
and Means Committee and
the Senate Finance Committee on all instances involving allegations of
misconduct by IRS
employees. This requirement was instituted in
1996 by the Taxpayer Bill of Rights 2 (P.L. 104-168, Act Sec. 1211). The report
must identify categories of any misconduct allegations during the past year, the
number of instances in each category, and the disposition during the year of
any complaints, regardless of when the misconduct occurred. The report covers
misconduct identified internally by the IRS
as well as cases
arising from taxpayer or third-party complaints.
The IRS
has not been required
to record allegations of misconduct against particular employees. In order to
increase the public perception that the IRS
is taking allegations
of misconduct seriously, the House Committee Report for the IRS
Restructuring and
Reform Bill suggested requiring personnel details to be recorded. In the
absence of records containing details about taxpayer complaints of misconduct
against individual employees, the IRS
would not be able to
adequately investigate the allegations or properly prepare its report to
Congress.
IRS
Restructuring and Reform Impact
Records of complaints
against individual IRS employees.--In collecting data for
the IRS
's annual report to Congress on allegations of IRS
employee misconduct,
the IRS
is required to maintain records of taxpayer
complaints on an individual-employee basis (Act Sec. 3701 of the IRS
Restructuring and
Reform Act of 1998). According to the House Committee Report, individual
records are not to be listed in the IRS
's annual report to
Congress on instances of employee misconduct (this report is required by Act
Sec. 1211 of the Taxpayer Bill of Rights 2, P.L. 104-168). However, according
to the House Committee Report, records of misconduct relating to individual IRS
employees are to be
used in evaluating individual employee performance.
ยท
Effective date. No specific effective date is provided by the
Act. The provision is, therefore, considered effective on July 22, 1998
, the date of
enactment. Individual records must be maintained beginning not later than January 1, 2000
.
ACT SEC . 1211. REPORTS ON
MISCONDUCT OF IRS EMPLOYEES.
On or before June 1 of
each calendar year after 1996, the Secretary of the Treasury shall submit to
the Committee on Ways and Means of the House of Representatives and the
Committee on Finance of the Senate a report on--
(1) all categories of instances involving the
misconduct of employees of the Internal Revenue Service during the preceding
calendar year, and
(2) the disposition during the preceding calendar
year of any such instances (without regard to the year of the misconduct).
*
* *
JCT
General Explanation of 1998 Tax Legislation (Blue Book), JCS-6-98
November 24, 1998
105th Congress
[JOINT COMMITTEE PRINT]
GENERAL EXPLANATION OF TAX LEGISLATION ENACTED IN 1998
PREPARED BY THE STAFF OF THE JOINT COMMITTEE ON TAXATION NOVEMBER 24, 1998
U.S.
GOVERNMENT PRINTING
OFFICE
SUMMARY CONTENTS
PART TWO: INTERNAL REVENUE SERVICE - RESTRUCTURING AND REFORM ACT OF 1998
(H.R. 2676) 14
E. Treasury Office of Inspector General; IRS Office of the Chief
Inspector (secs. 1102 and 1103 of the Act, sec. 7803(d) of the Code, and secs.
2, 8D, and 9 of the Inspector General Act of 1978)
Present and Prior Law
Treasury Inspector General
In general
The Treasury Office of Inspector General ("Treasury IG") was
established in 1988 and charged with conducting independent audits,
investigations and review to help the Department of Treasury accomplish its
mission, improve its programs and operations, promote economy, efficiency and
effectiveness, and prevent and detect fraud and abuse. The Treasury IG derives
its statutory authority under the Inspector General Act of 1978, as amended
("IG Act of 1978").
Appointment and qualifications
The IG Act of 1978 provides that the Treasury IG is selected by the President,
with the advice and consent of the Senate, without regard to political
affiliation and solely on the basis of integrity and demonstrated ability in
accounting, auditing, financial analysis, law, management analysis, public administration,
or investigations. The Treasury IG can be removed from office by the President.
The President must communicate the reasons for such removal to both Houses of
Congress.
Duties and responsibilities
The Treasury IG generally is authorized to conduct, supervise and coordinate
internal audits and investigations relating to the programs and operations of
the Treasury, including all of its bureaus and offices.
29 Special rules apply, however, with
respect to the Treasury IG's jurisdiction over ATF, Customs, the Secret Service
and the IRS
--the four so-called "law enforcement
bureaus." Upon its establishment, the Treasury IG assumed the internal
audit functions previously performed by the offices of internal affairs of ATF,
Customs and the Secret Service. Although the Treasury IG was granted oversight
responsibility for the internal investigations performed by the Office of
Internal Affairs of ATF, the Office of Internal Affairs of Customs, and the
Office of Inspections of the Secret Service, the internal investigation or inspection
functions of these offices remained with the respective bureaus. The Treasury
IG did not assume responsibility for either the internal audit or inspection
functions of the IRS
Office of the Chief
Inspector. However, it was directed to oversee the internal audits and internal
investigations performed by the IRS
Office of the Chief
Inspector.
The Commissioner and the Treasury IG have entered into two Memorandums of
Understanding ("MOUs")
30 to clarify the respective roles of
the IRS
Office of the Chief Inspector and the Treasury
IG in two primary areas: (1) the investigation of allegations of wrongdoing by IRS executives and employees in situations
where the independence of the Office of the Chief Inspector could be
questioned, and (2) oversight by the Treasury IG of the IRS
Office of the Chief
Inspector.31 Pursuant to the 1990 MOU, the
Commissioner agreed to transfer 21 FTEs and $1.9 million from the IRS
appropriation to the
Treasury IG appropriation to be used for the following purposes: (1) oversight
of the operations of the Office of the Chief Inspector; (2) conduct of special
reviews of IRS
operations; (3) investigation of allegations of
misconduct concerning the Commissioner, the Senior Deputy Commissioner, and
employees of the IRS
Office of the Chief
Inspector; and (4) investigation of allegations of misconduct where the
independence of the IRS
Office of the Chief
Inspector might be questioned. With respect to item (4), the Commissioner and
Treasury IG agreed that all allegations of misconduct involving IRS
executives and managers
(Grade 15 and above), as well as any other allegation involving
"significant or notorious" matters were to be referred to the
Treasury IG, and that investigations arising out of such referrals generally
would be conducted by the Treasury IG.
In general, under the IG Act of 1978, Inspectors General are instructed to
report expeditiously to the Attorney General whenever the Inspector General has
reasonable grounds to believe there has been a violation of Federal criminal
law. However, in matters involving criminal violations of the Internal Revenue
Code, the Treasury IG may report to the Attorney General only those offenses
under section
7214
of the Code (unlawful acts of revenue officers or
agents, including extortion, bribery and fraud) without the consent of the
Commissioner.
Authority
The Treasury IG reports to and is under the general supervision of the
Secretary of Treasury, acting through the Deputy Secretary. In general, the
Secretary cannot prevent or prohibit the Treasury IG from initiating, carrying
out, or completing any audit or investigation or from issuing any subpoena
during the course of any audit or investigation.
However, section 8D of the IG Act of 1978 grants the Secretary authority to prohibit
audits or investigations by the Treasury IG under certain circumstances. In
particular, the Treasury IG is under the authority, direction, and control of
the Secretary with respect to audits or investigations, or the issuance of
subpoenas, which require access to sensitive information concerning: (1)
ongoing criminal investigations or proceedings; (2) undercover operations; (3)
the identity of confidential sources, including protected witnesses; (4)
deliberations and decisions on policy matters, including documented information
used as a basis for making policy decisions, the disclosure of which could
reasonably be expected to have a significant influence on the economy or market
behavior; (5) intelligence or counterintelligence matters; (6) other matters
the disclosure of which would constitute a serious threat to national security
or to the protection of certain persons. With respect to audits, investigations
or subpoenas that require access to the above-listed information, the Secretary
may prohibit the Treasury IG from carrying out such audit, investigation or
subpoena if the Secretary determines that such prohibition is necessary to
prevent the disclosure of such information or to prevent significant impairment
to the national interests of the United States
. The Secretary must
provide written notice of such a prohibition to the Treasury IG, who must, in
turn, transmit a copy of such notice to the Committees on Government Reform and
Oversight and Ways and Means of the House and the Committees on Governmental
Affairs and Finance of the Senate.
Access to taxpayer returns and return information
The Treasury IG has access to taxpayer returns and return information under
section 6103(h)(1) of the Code. However, such access is subject to certain
special requirements, including the requirement that the Treasury IG notify the
IRS
Office of the Chief Inspector (or the Deputy
Commissioner in certain circumstances) of its intent to access returns and
return information.
Reporting requirements
Under the IG Act of 1978, the Treasury IG reports to the Congress semiannually
on its activities. Reports from the Treasury IG are transmitted to the
Committees on Government Reform and Oversight and Ways and Means of the House
and the Committees on Governmental Affairs and Finance of the Senate.
Resources
For fiscal year 1997, the Treasury IG had 296 FTEs and total funding of $29.7
million. 174 FTEs were assigned to the Treasury IG's audit function and 61 were
assigned to the investigative function. The remaining FTEs were divided among
the following functions: evaluations, legal, program, technology and
administrative support. Of the total Treasury IG FTEs, approximately 23 were
used for IRS
oversight activities in fiscal year 1997.
IRS
Office of Chief Inspector
The IRS
Office of the Chief Inspector (also known as
the "Inspection Service") was established on October 1, 19
51, in response to
publicity revealing widespread corruption in the IRS
. At the time of its
creation, President Harry S. Truman stated, "A strong, vigorous inspection
service will be established and will be made completely independent of the rest
of the Internal Revenue Service."
In general
The Act establishes a new independent, Treasury Inspector General for Tax
Administration ("Treasury IG for Tax Administration") within the
Department of Treasury. The IRS
Office of the Chief
Inspector is eliminated, and all of its powers and responsibilities are
transferred to the Treasury IG for Tax Administration. The Treasury IG for Tax
Administration has the powers and responsibilities generally granted to
Inspectors General under the IG Act of 1978, without the limitations that
currently apply to the Treasury IG under section D of the Act. The role of the
existing Treasury IG is redefined to exclude responsibility for the IRS
. The Treasury IG for
Tax Administration is under the supervision of the Secretary of Treasury, with
certain additional reporting to the Oversight Board and the Congress.
Duties and responsibilities of Treasury IG for Tax Administration
The Treasury IG for Tax Administration has the present-law duties and
responsibilities currently delegated to the Treasury IG with respect to the IRS
. In addition, the
Treasury IG for Tax Administration assumes all of the duties and
responsibilities currently delegated to the IRS
Office of the Chief
Inspector. The Treasury IG for Tax Administration has jurisdiction over IRS
matters, as well as
matters involving the Board.
Accordingly, the Treasury IG for Tax Administration is charged with conducting
audits, investigations, and evaluations of IRS
programs and operations
(including the Board) to promote the economic, efficient and effective
administration of the nation's tax laws and to detect and deter fraud and abuse
in IRS programs and operations. In this regard, the
Treasury IG for Tax Administration specifically is directed to evaluate the
adequacy and security of IRS
technology on an
ongoing basis. The Treasury IG for Tax Administration is charged with
investigating allegations of criminal misconduct (e.g., Code sections 7212, 7213,
7214, 7216 and new section 7217), as
well as administrative misconduct (e.g., violations of the Taxpayer Bill of
Rights and the Taxpayer Bill of Rights 2, the Office of Government Ethics
Standards of Ethical Conduct and the IRS Supplemental Standards
of Ethical Conduct).
Effective Date
The provision is effective 180 days after the date of enactment (January 18,
1999).
32
Revenue Effect
The provision is estimated to have no effect on Federal fiscal year budget
receipts.
F. Prohibition on Executive Branch Influence Over Taxpayer Audits (sec. 1105 of the
Act and new sec. 7217 of the Code)
Present and Prior Law
There was no prior-law explicit prohibition in the Code against high-level
Executive Branch influence over taxpayer audits and collection activity.
The Internal Revenue Code prohibits disclosure of tax returns and return
information, except to the extent specifically authorized by the Internal
Revenue Code (sec. 6103). Unauthorized disclosure is a felony punishable by a
fine not exceeding $5,000 or imprisonment of not more than five years, or both
(sec. 7213). An action for civil damages also may be brought for unauthorized
disclosure (sec. 7431).
Reasons for Change
The Congress believed that the perception that it is possible that high-level
Executive Branch influence over taxpayer audits and collection activity could
occur has a negative influence on taxpayers' views of the tax system.
Accordingly, the Congress believed that it is appropriate to
|