IRS Section 1203

I’m a fan and regular reader. Thanks for your yeoman’s work on the IRS scandal. I’m also retired from a 35-year law enforcement career, 22 of which were at the IRS Criminal Investigation Division, so I have some insight into the Service and its workings (although I spent all but one year doing money laundering – narcotics, and organized crime cases – rather than tax.)

I’m quite surprised that no one has mentioned Section 1203 of the Internal Revenue Code, which mandates terminations of IRS employees who commit any of what are known in the Service as the “10 Deadly Sins.” Passed in the 19990s after the last major Congressional hearings (Revenue Reform Act of 1998), section 1203 is the neutron bomb that hangs over employees. Violations of 1203 are supposed to be non-negotiable, with termination the only result, although I believe the Commissioner can mitigate and sometimes does, usually in cases involving non-wilfull understatement of tax liability.

Good find and worth knowing even for general purposes.

Surely Trey Gowdy knows about this?

On its face, section 1203 requires a final administrative or judicial determination. In the current scandal, we don’t even have pending administrative or judicial proceedings. Here is section 1203:

(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 therefore (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.

So, how do I explain a revenue agent in EO who has open cases that are 300 or even 700 days overdue? The only possible explanation is that management was okay with it, because it is absolutely impossible that they – and this includes everyone in the chain – didn’t know. Maybe they’ve got a good reason why they were okay with it, but the whole chain had to sign off on it. All the way to DC.

I used to work for a US government operation (best not to identify). They had a job-order system....so when someone called and opened a ticket...there was a standard that the ticket had to fixed or come to a conclusion within twenty-four hours, or it got flagged. Well...I had a problem that I called in...on a Thursday afternoon. Friday came, and no one arrived to fix the issue. So I wait till Monday...around noon, and call the help-desk.

The boys there said that the ticket had been closed by Friday afternoon....because if they didn’t close it...it would have been flagged, and become a bad statistic for the organization.

I got hyper with the young guy (young enlisted guy) and just said that the system wasn’t supposed to be run like that. And his response was that this might be true....but the leadership had turned it into an instrument of doom. So all tickets got closed near the twenty-four hour cycle, whether fixed or not.

The flag-mentality is screwed up, and probably just looks good on paper. In reality, folks can’t work with it.

I didn't understand this before going to the whole article where he explained that elapsed time on a case is the primary metric for evaluating job performance right through the whole management chain.

The other thing I’d point out that is very odd about this is that IRS has been prohibited – by that same RRA98 – from using enforcement statistics to measure employee performance. Nobody’s allowed to rate you on how many cases you made, how many arrests, convictions, seizures, levies, taxes assessed, etc. Managers get in big trouble for that, but they still have to evaluate employee performance somehow, so the Service devised this whole scheme that revolves around time.

Elapsed time on a case is a huge issue. Agents get dinged if they’ve got too many hours or if a case drags on for too long. It’s all tracked in the computerized case management system, and managers get in trouble with their managers if their “inventory” (and yes, that is the term that is used to describe your case load) has overage cases. I can’t stress enough how important this is to the Service, and every employee knows it. Your performance report is going to be affected by overage cases, too many hours on a case, etc., but more importantly, the manager’s performance report is going to be affected, and her manager’s, and so on.

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