The Internal Revenue Service vowed to appeal a decision by a federal arbitrator that the agency cannot raise the accounting qualifications for newly hired revenue agents from 24 to 30 hours.
"To protect the public's interest, American taxpayers deserve someone with the equivalent of a college accounting degree conducting IRS audits," said IRS Commissioner Mark W. Everson in response to the July 9 ruling that the IRS cannot increase the number of hours of accounting coursework required of candidates for the position of revenue agent.
It was 10 years ago that the IRS first proposed increasing the number of credits in college-level accounting courses required of revenue agent applicants from 24 to 30 hours. The proposed increase was a result of a recommendation from an occupational study of revenue agent positions prepared by the U.S. Office of Personnel Management, the government’s human resources organization.
In addition to recommending an increase in the total number of semester hours of accounting education for revenue agent applicants, the OPM study also emphasized the need for coursework that reflects knowledge in five specific competencies: basic, intermediate, and advanced accounting, cost accounting and auditing. The IRS adopted both of the OPM recommendations.
The IRS has been using these guidelines for hiring decisions since 1995. But the guidelines were just a recommendation, not the law, and the IRS has spent years caught up in a disagreement with the National Treasury Employees Union over whether the guidelines can remain in place.
The employee organization has stated that the more extensive educational requirements represent “a move to impose unnecessary obstacles on internal candidates.” The NTEU represents 150,000 federal workers around the country, including approximately 98,000 employees of the IRS.
Specifically, the NTEU argued that the new education requirements serve to prevent current federal employees from advancing to the position of revenue agent. In a statement, union president Colleen M. Kelley said that the attempt to impose stricter education requirements is “a move to impose unnecessary obstacles on internal candidates.”
The matter finally came to a head this summer when the two groups arranged for an arbitrator, Carlton J. Snow, to review the matter. After hearing both sides of the controversy, Snow ruled in favor of the NTEU, stating that the IRS standards violated the law, as well as the union’s contract with the IRS. He ruled that the IRS cannot raise the required hours to 30, nor can it impose the requirement of the five competencies.
One point on which the arbitrator based his decision is the fact that all previously hired revenue agents who met only the 24-hour coursework requirement would not be required to meet the new standard. In Snow’s decision, he indicated that “clear and convincing evidence submitted by the parties establishes that the duties of a revenue agent can be and are being performed by individuals who have not completed the prescribed 30 hours of accounting and related courses.”
Just as with CPAs who were certified in earlier years and who are not expected to recertify, as colleges impose new education requirements for accounting degrees, the IRS has taken the position that existing revenue agents would be able to maintain their position in the IRS without having to take additional coursework.
Kelley feels that this is evidence enough that the current group of revenue agents, some of whom do not meet the 30-hour/five-course requirement, is completely capable of doing the work required of the job. “[The] NTEU is very supportive of the IRS hiring qualified, competent and highly skilled individuals as revenue agents,” Kelley said. “And that is exactly what today’s workforce is.”
Everson wants to make the 30-hour/five-subject competency a permanent requirement for new revenue agents. He believes that if revenue agents do not increase their accounting education, “we will be hard-pressed to meet the challenges of increasingly complex schemes to hide income from IRS scrutiny.” He has vowed to appeal the arbitration ruling. He also stresses the fact that, while the former (pre-1995) education requirement was only 24 semester hours of accounting, almost all of the current revenue agents do meet the more current requirement.
Kelley stressed the point that, “This arbitration is not about whether or not the IRS can hire employees who have 30 credits of accounting or these five courses. The dispute is over whether the minimum qualifications for the revenue agent position need to be increased. We have seen no evidence presented, nor apparently did the arbitrator, that shows the IRS has made the case that they should make [in order to] change the qualification standards.”
The IRS has vowed to appeal the arbitration ruling. The arbitrator has ordered the IRS and NTEU to try to reach a compromise within 90 days of the July 9 decision. According to Kelley, “The NTEU is open to talking to the IRS” in an effort to reach a compromise.
The IRS said that almost all of the current 11,700 revenue agents already meet the 30-hour standard, and that it would continue to maintain that standard pending the appeal process.
If no agreement is reached, the next step is for the IRS to appeal the decision to the Federal Labor Relations Authority.
The FLRA is an independent agency that administers labor relations for federal employees. The FLRA would then decide whether or not to uphold the arbitration decision.
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