DESCRIPTION OF H.R. 1206, A BILL TO PROHIBIT THE HIRING 

OF ADDITIONAL INTERNAL REVENUE SERVICE EMPLOYEES 

UNTIL THE SECRETARY OF THE TREASURY CERTIFIES 

THAT NO INTERNAL REVENUE SERVICE EMPLOYEE HAS 

SERIOUSLY DELINQUENT TAX DEBT 

Scheduled for Markup 

by the 

HOUSE COMMITTEE ON WAYS AND MEANS 

on April 13, 2016 

Prepared by the Staff 

of the 

JOINT COMMITTEE ON TAXATION 

 

 

April 12, 2016 

JCX-17-16
i 

CONTENTS 

Page

INTRODUCTION .......................................................................................................................... 1

A. Prohibition of Hiring of Additional Internal Revenue Service Employees Until 

 the Secretary of the Treasury Certifies that No Employee of the Internal Revenue 

 Service Has a Seriously Delinquent Tax Debt ................................................................. 2

B. Estimated Revenue Effect of the Proposal ....................................................................... 4
1 

INTRODUCTION 

The House Committee on Ways and Means has scheduled a committee markup of 

H.R. 1206, a bill to prohibit the hiring of additional Internal Revenue Service (“IRS”) employees 

until the Secretary of the Treasury certifies that no employee of the IRS has a seriously 

delinquent tax debt. This document,1

 prepared by the staff of the Joint Committee on Taxation, 

provides a description of the bill. 

 1

 This document may be cited as follows: Joint Committee on Taxation, Description of H.R. 1206, A Bill to 

Prohibit the Hiring of Additional Internal Revenue Service Employees Until The Secretary of the Treasury Certifies 

That No Internal Revenue Service Employee Has Seriously Delinquent Tax Debt (JCX-17-16), April 12, 2016. This 

document can also be found on the Joint Committee on Taxation website at www.jct.gov. 
2 

A. Prohibition of Hiring of Additional Internal Revenue Service Employees 

Until the Secretary of the Treasury Certifies that No Employee 

of the Internal Revenue Service Has a Seriously Delinquent Tax Debt 

Present Law

The Code2

 provides that the Commissioner of the IRS has such duties and powers as 

prescribed by the Secretary. Unless otherwise specified by the Secretary, such duties and powers 

include the power to administer, manage, conduct, direct, and supervise the execution and 

application of the internal revenue laws or related statutes and tax conventions to which the 

United States is a party, and to recommend to the President a candidate for Chief Counsel (and 

recommend the removal of the Chief Counsel). Unless otherwise specified by the Secretary, the 

Commissioner is authorized to employ such persons as the Commissioner deems proper for the 

administration and enforcement of the internal revenue laws and is required to issue all necessary 

directions, instructions, orders, and rules applicable to such persons,3 including determination 

and designation of posts of duty. 

Employees of the IRS are subject to rules governing Federal employment generally.4

 As 

part of the basic obligation of public service, all Federal employees are required to comply with 

all legal and financial obligations, “especially those - such as Federal, State, or local taxes - that 

are imposed by law.”5

 Failure to do so can result in disciplinary action. An employee of the IRS 

is subject to termination for 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 and willful 

understatement of Federal tax liability, unless such understatement is due to reasonable cause.6 

Standards of Ethical Conduct for Employees of the Executive Branch are supplemented 

by additional rules applicable to employees of the Department of the Treasury.7 To enforce these 

standards, the IRS requires pre-employment audits of all employees and reviews employee 

compliance with filing requirements. Examinations of IRS employees are accorded high priority 

and are subject to mandatory review.8

 2

 Sec. 7803(a). 

3

 Sec. 7804. 

4

 Part III of Title 5 of the United States Code prescribes rules for Federal employment, including 

employment, retention, and management and employee issues. 

5

 5 C.F.R. 2635.101(b)(12). 

6

 The IRS Restructuring and Reform Act of 1998, Pub. L. No. 105-206, sec. 1203(b), July 22, 1998. 

7

 Standards of Ethical Conduct for Employees of the Executive Branch, 5 C.F.R. 735. 5 CFR Part 3101, 

Supplemental Standards of Ethical Conduct for Employees of the Department of the Treasury; 31 CFR Part 0, 

Department of the Treasury Employee Rules of Conduct. 

8

 See, Policy Statement 4-9, Highest Integrity Expected, IRM 1.2.13.1.7; “Examination of Employee 

Returns,” IRM 4.2.6, available at https://www.irs.gov/irm/part4/irm_04-002-006.html#d0e550. 
3 

Explanation of Provision

No offer of employment at the IRS may be extended to anyone until after the date on 

which the Secretary publicly certifies that the IRS does not employ any individual who has 

seriously delinquent tax debt. 

“Seriously delinquent tax debt” is any outstanding Federal tax liability (including interest 

and penalties) for which a notice of lien has been filed. Even if a tax debt otherwise meets the 

statutory threshold, it may not be considered seriously delinquent if (1) the debt is being paid in a 

timely manner pursuant to an installment agreement or offer-in-compromise, (2) collection 

action with respect to the debt is suspended because a collection due process hearing or innocent 

spouse relief has been requested or is pending, (3) the debt is subject to a levy under section 

6331 (or an applicant for employment has agreed to be subject to a levy under section 6331) or 

(4) the debt was released from levy under the authority of section 6343(a)(1)(D) based on a 

determination that levy on such debt was creating economic hardship. 

Effective Date

The proposal is effective after the date of enactment. 

 
4 

B. Estimated Revenue Effect of the Proposal 

The proposal cannot be readily estimated at this time but is likely to have a negative 

effect on Federal fiscal year budget receipts for the period 2016-2026. Although information 

about the existence of employee examinations may be available to the officials preparing the 

certification, it is not clear whether the IRS has the current ability to track the existence of tax 

debt of its employees and determine whether such debt is within the meaning of seriously 

delinquent tax debt. That inability could lead to reluctance on the part of officials to sign a 

certification with regard to the existence or nonexistence of employee tax debt. The resulting 

inability of the IRS to hire anyone would likely erode both enforcement capability and voluntary 

compliance, and result in a revenue loss. 

The extent to which the proposal may increase or decrease Federal outlays for the same 

period 2016-2026 has not been estimated. In accordance with section 402 of the Budget Act, the 

Congressional Budget Office has jurisdiction to estimate the effect on direct or discretionary 

spending.