IV. Prohibition on Executive Branch Influence over
Audits and Personnel Flexibilities
A. Prohibition on Executive Branch Influence Over
Taxpayer Audits (House bill)
Prohibit high level Executive Branch Officials (subject to certain exceptions)
from requesting the IRS to conduct or terminate an audit or investigation of any
B. IRS Personnel Flexibilities
Provide personnel tools that will enable the Commissioner to reorganize the IRS.
1. Flexibilities for Senior Management, Professional and Technical Positions
In order to give the IRS commissioner the ability to bring
the type of executives to the IRS that he feels is necessary
to effect the change in the organization, there would need
to be changes in the current personnel programs.
Currently, the number of employees the Commissioner
can appoint and the pay and other remuneration that can
be given to these employees is limited. For example, the
Commissioner can only appoint three individuals to
senior positions who are not IRS career service
employees. These changes would be as follows:
a. Give the IRS Commissioner the authority to fill
senior executive service positions which were
reserved for IRS career service employees with
limited or temporary appointments of individuals
who have not had a career with the IRS. These
individuals would have time limits on their
employment of up to three years (which could be
extended). It is anticipated that these type of
employees would be brought into the IRS to
perform specific functions and then return to the
b. Provide that the Treasury Secretary may appoint up
to 40 senior executives with technical, professional
and management expertise at pay levels not in
excess of the compensation of the Vice President
without approval of the OPM and OMB. In
addition, the Treasury Secretary may appoint
individuals to critical positions other than those
established under the streamlined authority for
senior executives at pay levels not in excess of the
compensation of the Vice President, with the
approval of OMB. The recruitment, retention, and
relocation incentives that the IRS can provide for
these type of senior executives would be expanded,
subject to the approval of the OPM.
c. As part of the return to a service-oriented culture
and to reward these new critical executives for
attaining specified performance results, the IRS will
be given the authority to provide for variable
compensation (i.e., bonuses) in excess of amounts
currently allowed for up to 25 senior IRS
executives. Any variable compensation award in
excess of 20% of basic pay would have to be
approved by the Treasury Secretary. In addition,
the amount of the award when combined with
other compensation of an individual cannot exceed
the compensation of the Vice President
2. Flexibilities for the General Workforce
a. Extend the voluntary separation incentive pay
program that ended December 31, 1997 to December
b. Establish streamlined demonstration authority to
establish new human resource programs within a
specified time period. The streamlining eliminates
or shortens some of the waiting periods and
comment periods that are usually applicable with
demonstration projects. The demonstration project
will be subject to the review of the OPM.
c. As the IRS decreases the levels of management in
its organization, the traditional ways of rewarding
superior performers by giving them higher
management authority (along with commensurate
pay increases) will not be as available as before. The
Treasury Secretary is given the authority (subject to
criteria established by the OPM) to restructure
employee pay rates in connection with
implementing a broad banded employee pay system
which will provide for increases in pay based on
increases in job competencies, but without the need
for moving to a higher level of management. This
will be different from the current government pay
and grading system.
d. The Treasury Secretary may establish a new
performance management system, developing
individual accountability for performance reviews.
In conjunction with this new performance review
system, the Treasury Secretary may also establish a
new incentive awards program which awards up to
$25,000 without OPM approval.
3. Any of the personnel flexibilities that affect employees
represented by a union must be agreed to between the IRS
and the union. If the union and the IRS cannot agree,
then the matter will be brought before the Federal Impasse
Panel for resolution.
4. Tentative Government Affairs Committee
The Government Affairs Committee generally approves
the personnel flexibility changes discussed above.
However, they suggest a number of changes:
a. All the personnel flexibility changes that are
discussed above should be included in a
demonstration project. This would mean that prior
to implementing these changes, there would be
notification of the each House of Congress and to
the employees likely to be affected by the change.
A demonstration project would normally last 5
years and a decision would be made at that point
whether to make the demonstration project official
or whether to cancel these changes. It is also
possible for the Treasury and the OPM to terminate
the demonstration project during its term.
b. They propose limitations on extensions of the
voluntary incentive pay program so that payments
are made only if actual employee headcount
reductions are made.
c. With regard to broad banding pay policies discussed
above, they recommend that cost controls be
established in the implementation plan.
d. Finally, they believe that the personnel flexibility
measures concerning incentive awards and
recruitment, retention and relocation bonuses
should be instituted government wide.
Streamlined demonstration authority should also
be available government wide.
5. Require the IRS to develop employee performance
measures that favor taxpayer service.
6. Require the IRS to terminate an employee if any of the
following conduct is proven in a disciplinary or other
a. Failure to obtain the required approval signatures
on documents authorizing the seizure of a
taxpayer's home, personal belongings, or business
b. Perjury (e.g., false testimony in a taxpayer's case,
failure to provide truthful information in the
course of a criminal investigation, or false
information in a deposition or affidavit)
c. Falsifying or destroying documents concerning a
particular taxpayer to cover-up employee mistakes.
d. Assault or battery on a taxpayer or other IRS
e. Violation of the civil rights of a taxpayer or other
f. Violation 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