Last year, an independent arbitrator ruled that the Internal Revenue Service violated federal law when it required applicants for its revenue agent position to have six credits more of accounting over what was needed for any other federal professional accounting position.The arbitrator held that the IRS had not, and could not, prove that the additional six hours - which increased the minimum requirement from 24 to 30 semester hours - were necessary for successful performance of the job. Therefore, it was in violation of 5 USC E3308, which requires that justification be shown before extra educational requirements can be imposed for federal jobs.
The NTEU challenged the agency's decision to arbitrate because the move by the IRS had the practical effect of barring many current talented, experienced and well-educated IRS employees from even being considered for promotion to open revenue agent positions - and it seemed to have a particularly heavy impact on minorities.
Despite the arbitrator's ruling some six months ago, which also noted that the IRS had violated its labor agreement with the NTEU by additionally requiring revenue agent applicants to have completed five specific accounting courses - the IRS is still mandating these requirements in hiring its next group of incoming revenue agents.
To prevent a large hiring of revenue agents for which the IRS planned to continue using the illegal and improper criteria, during the period when the arbitrator would be considering what remedy to impose, the NTEU asked the arbitrator to impose a stay barring the IRS from using the illegal criteria. While the arbitrator denied our request - stating that the current round of hiring was too far advanced to halt the process - he did leave the door open to a stay on future hiring.
The NTEU fully supports the idea that IRS employees must be skilled and qualified, but the previous IRS minimum requirement of 24 semester hours - the standard for every other professional federal accountant, whether working for the Securities and Exchange Commission, the Federal Deposit Insurance Corp., the Federal Bureau of Investigation or the Department of Defense - is sufficient.
A quick search of the minimum qualifications requirements at such major accounting firms as KPMG, Deloitte and Ernst & Young shows that none of them require a specific number of hours in accounting, just a Bachelor's degree in the field. And many of the country's best accounting schools require far fewer than 30 credits of accounting for an accounting degree. The University of Pennsylvania's Wharton School, as well as the University of Virginia, require only 18 semester hours, while Georgetown calls for 21.
Indeed, the NTEU has long maintained that the IRS is free to take these extra classes into account as part of its ultimate hiring decision; the NTEU asks only that others be allowed to apply and be considered based on tax enforcement experience and work achievements that outweigh specific college courses taken.
The IRS said that it needs to impose these additional requirements as part of its strategy to address the $85 billion in "uncollected tax liability" and increases in "tax avoidance transactions." In fact, however, the IRS has been hiring new revenue agents under the 30-hour requirement for more than six years, and during that time, the "tax gap" has grown by leaps and bounds. During the last two years alone, the "tax gap" increased by an additional $20 billion, by the IRS's own estimate. IRS enforcement challenges - albeit significant - are thus clearly unrelated to whether brand-new revenue agents have 30 semester hours of accounting, instead of 24. If there was such a relationship, the IRS would have required of its managers the same training required for newly hired employees.
Upon imposing these unlawful educational requirements, the IRS is focused on the wrong criteria. As a former IRS revenue agent and CPA, I can say that the skills and abilities revenue agents need to close the "tax gap" include a solid accounting background but, more important, also include the significant in-house training of up to a year in tax law enforcement that the IRS conducts for all externally hired revenue agents.
It is impossible for a newly hired revenue agent from outside the IRS, no matter how many accounting courses are under her belt, to walk into this position and be immediately successful. In contrast, internal hires - in most cases with many years of experience in other IRS tax compliance jobs - are far more ready to hit the ground running and be immediately successful and productive.
I can only conclude that the IRS wants the additional requirements to serve as a bar to internal candidates. The IRS is eliminating from consideration many highly qualified applicants for revenue agent positions and discounting the significant value that on-the-job experience offers. For many experienced workers, returning to school to take additional courses is not possible because of family considerations, cost or other demands. Perhaps the most puzzling part of the IRS decision to add requirements is that now it requires five specific accounting courses, but none of them include tax accounting, the subject most current employees commonly study.
In my view, the most effective means of developing a high-performing workforce is by leveraging the years of experience and knowledge offered by veteran IRS employees, not by imposing additional arbitrary education requirements that clearly add little to the potential success of a revenue agent.
The NTEU is urging an expedited resolution of this case. The IRS should not be permitted to ignore the law and deny qualified applicants the right to compete.
Colleen M. Kelley is national president of the National Treasury Employees Union.
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