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Part 6. Human Resources Management

Chapter 735. Ethics and Conduct Matters

Section 1. Ethic and Conduct Matters: Guidance

6.735.1  Ethic and Conduct Matters: Guidance

6.735.1.1  (12-08-2008)
Handbooks

  1. "The IRS Supervisor's Guide to Conduct and Discipline and Related Topics," Document 12109, contains information on employee conduct as well as administrative responsibilities and procedures required for the implementation and administration of the ethics regulations.

  2. Distribution of Document 12109 (http://publish.no.irs.gov/DOCS/PDF/37270J03.PDF) will be to all supervisors and human resource specialists.

  3. The government-wide and agency ethics regulations are summarized in Document 12011, "Plain Talk about Ethics and Conduct," designed to give employee full notice of their responsibilities under the ethics regulations.

  4. Document 12011 (http://publish.no.irs.gov/DOCS/PDF/35691DO3.PDF) is distributed to all employees and will be furnished to each new employee when appointed.

  5. A detachable receipt for employee signature will be included in Document 12011. The supervisor will secure a signed certification form from each employee and will file a signed form in the employee drop file as a permanent document.

6.735.1.2  (12-08-2008)
Matters Concerning Official Activities

  1. NOTE: The following provisions were part of the IRS Rules of Conduct and although they are not part of the Treasury Employees Rules of Conduct, they serve as examples of the agency's continuing expectations of employee conduct and can result in discipline if not adhered to.

  2. Performance of Duty : You are expected to conscientiously perform your duties to the Government and the public, respond readily to the direction of your supervisor, and conduct your relations with fellow employees in a manner that does not cause dissension or discord.

  3. Observance of Duty Hours : Employees must observe designated duty hours and be punctual in reporting for work and returning from lunch and breaks. Leave is to be used in accordance with its intended purpose and must be approved in advance whenever possible.

  4. Appearance : Employees are expected to groom themselves in a manner fitting to the surrounding into which their work assignments take them.

6.735.1.3  (12-08-2008)
Applicable Authorities

  1. 5 CFR 2635; 5 CFR 3101; CFR Part 0; 5 CFR 735 (http://www.gpoaccess.gov/cfr/index.html)

6.735.1.4  (12-08-2008)
Outside Employment and Business Activity, Interpretive Guidance, and Considerations

  1. Internal Revenue Service employees are allowed to engage in outside employment or business activities, whether performed outside official hours of duty or while in an approved leave status after obtaining written approval. Consistency with 5 CFR §3101.104 and Document 12011 is required. Following are general rules and guidelines to follow when completing or reviewing Form 7995 (Rev. 12-2007), Outside Employment or Business Activity Request.

    1. The outside activity must conform to general ethical requirements as set forth in the Office of Government Ethics (OGE) Standards of Ethical Conduct for Employees of the Executive Branch (5 CFR §2635) and to specific ethical requirements as set forth in the Treasury Supplemental Standards (5 CFR §3101),

    2. The outside activity may not conflict with the employee's official duties. Such a conflict exists if:

    1. the activity is prohibited by statute or supplemental agency regulations; or

    2. it would require the employee's disqualification from matters so central or critical to the performance of his/her official duties that the employee's ability to perform those duties would be materially impaired.

    1. c) The outside activity (unless otherwise permitted) may not deal directly with any tax related matters.

    2. d) The outside activity may not result in the improper use of Government property, including non-public official information obtained in connection with the employee's government duties or position.

    3. e) Official duty time may not be used to pursue the outside activity.

    4. f) The outside activity may not impact the effectiveness of the employee on the job (e.g., working an eight-hour night shift).

    5. g) The employee must not advertise his/her employment with the Service to generate business.

    6. h) If the outside activity is prohibited, the employee may not do it indirectly, that is in the name of, or through family members.

  2. Employees should review the OGE Standards (5 CFR §2635), Treasury Supplemental Standards (5 CFR §3101, Plain Talk about Ethics and Conduct (Document 12011), and the Treasury Employee Rules of Conduct (31 CFR Part 0) for additional information on outside employment.

6.735.1.4.1  (12-08-2008)
Outside Activities Not Requiring Prior Approval

  1. Permission is not required to engage in outside activities that are not considered employment or business. The following are examples of activities that do not require prior approval:

    1. Membership and services (including holding office) in civic, scout, religious, educational, fraternal, social, community, veteran and charitable organizations, including corporations, where such office or services do not entail the management of a business type activity such as the direct operation of a commercial type clubhouse.

    2. Membership and services (including holding of office) in Federal Employee organizations and recognized Federal employee unions. However, employees in certain positions (e.g., Senior Executives) are prohibited from holding office in Federal employee unions. If there is any doubt as to the propriety of accepting an office, the matter should be promptly referred to the servicing Labor and Employee Relations office for assistance.

    3. Membership and services (including holding office) in the local office of a credit union, whether or not it is run by or for the IRS personnel. Services may include paid bookkeeping work performed by the treasurer, or part-time clerical or teller services.

    4. Services as a Notary Public.

    5. A sale of articles to coworkers, friends, relatives, and neighbors not involving sales to, and solicitation of, the general public. Such sales must not be solicited for or transacted during office hours or in space occupied by Treasury or Service offices.

    6. Minor services and odd jobs for friends, relatives, or neighbors.

    7. Furnishing advice and assistance in the preparation of tax returns where no fee or other consideration is accepted.

    8. Rental of personally owned property, real or personal. However, employees must seek written approval if the extent or scope of such rental activities could lead others reasonably to conclude that the employee is involved in the operation of a commercial business venture.

    9. Temporary (30 days or less) emergency assistance in a family enterprise in cases of an emergency, such as the death or serious illness of, or incapacitating accident to, a member of the family engaged in such business. This exception is meant to ensure that the employee will not, by administrative restrictions, be denied the right immediately to assume a share of the responsibilities in family emergencies. Written permission is required if the need for such assistance continues beyond 30 calendar days or occurs more often than once in a calendar year.

    10. Being custodian of one's child's property, or acting as administrator, executor, guardian, or attorney-in-fact for a relative or friend provided the duties do not entail operation of a business. Such services are not considered legal employment or practice. Acceptance of an executors or trustees fee is permissible if no part of the fee is specifically identified as payment for tax return preparation.

    11. Unpaid bookkeeping, preparation of tax returns and other forms required by the Service, and the maintenance of other records for civic, religious, educational, and charitable non-profit organizations that are exempt from Federal income tax.

6.735.1.4.2  (12-08-2008)
General Procedures

  1. An employee must submit Form 7995 (Rev. 12-2007), Outside Employment and Business Request to his/her immediate supervisor for approval. (http://publish.no.irs.gov/FORMS/INTERNAL/PDF/43844A04.pdf)

  2. The approval or disapproval should be made within ten (10) workdays by the supervisor. At any level of review, management has the right to request more specific information on the employment or business activity. Management should contact the servicing Labor/Employee Relations office if there is any question or concern over the type of employment or business activity the employee is or will be involved in.

  3. The supervisor or other management official believes the employee's proposed outside activity may result in a conflict of interest or otherwise would be in conflict with applicable ethics rules, he/she may seek advice from the servicing Labor/Employee Relations office or the Associate Chief Counsel (General Legal Services (GLS)) before taking action on the employee's outside employment request.

  4. If the request is approved, the supervisor will forward the original to the National Records Center (NRC) in Kansas City, Missouri to be placed in the employee's Official Personnel Folder (OPF) and one copy to the Servicing Labor Relations office where it will be retained under lock and key. The manager will also place a copy in the employee's drop file. Requests that have been disapproved will also be distributed and retained in the manner described above.

  5. When the nature of an employee's position or location changes, he/she must submit a new Form 7995, and indicate in Item 8 that he/she has an approved outside employment request in his/her previous location. The employee should also ask his/her manager for the file copy of the previously approved form. The employee should write "VOID" across the face of the form, sign and date it. The manager will follow the same processing procedures used for distribution of the initial request.

  6. Manager's must review all outside employment forms annually to ensure information is still current. If the outside employment changes or is discontinued, the employee should ask his/her manager for the file copy of the previously approved form. The employee should write "VOID" across the face of the form, sign and date it. The manager will follow the same processing procedures used for distribution of the initial request.

  7. If the request does not clearly fall within the parameters of the aforementioned rules, the supervisor will forward the Form 7995 to the servicing Labor/Employee Relations office for review and assistance. When it is not clear if the request complies with the general rules, the Labor/Employee Relations office will submit a request for a formal opinion from the Associate Chief Counsel (GLS) in the General Legal Services office.

6.735.1.5  (12-08-2008)
Requesting Deputy Ethics Official Opinion

  1. The Associate Chief Counsel, General Legal Services, Washington, DC is the Service's "Deputy Ethics Official (DEO)" . The duties of the DEO include providing IRS employees with counseling regarding interpretation or application of the rules of conduct, related statute or regulations, and conflict of interest questions. Employees desiring to avail themselves of the DEO's services regarding matters of immediate or future personal interest or involving prospective employment should contact their servicing Labor Relations office or his/her immediate supervisor, for instructions or to view the procedures for seeking DEO advice as shown in the "Plain Talk About Ethics and Conduct" guide or on the Ethics Advice page on EthicsLink.

6.735.1.5.1  (12-08-2008)
Referral of Questions to Supervisors

  1. Any employee who has a question of immediate personal interest concerning the interpretation or application of the OGE Standards of Ethical Conduct, Treasury Supplemental Standards or Ethical Conduct Treasure Employee Rules of Conduct, and related statutes and conflict of interest questions, may secure a written answer by referring that question, in writing, to his/her immediate supervisor. The employee's supervisor will obtain necessary technical advice and assistance through the servicing Labor Relations office, or where appropriate, refer the employee's question to that office for further analysis and reply.

  2. When the employee's request has been referred to the servicing Labor/Employee Relations office, the Labor Relations Specialist will prepare the necessary reply and deliver it to the supervisor in order that the supervisor may respond to the employee within ten (10) workdays.

6.735.1.5.2  (12-08-2008)
Referral of Questions to the Deputy Ethics Official

  1. Any employee whose written question involves future personal actions contemplated, but not yet undertaken, is entitled, upon request, to have the question referred to the Deputy Ethics Official (DEO). Such questions must concern the interpretation or application of the ethics statutes and regulations interest questions and shall be subject to the following provisions:

    1. Following receipt of a response from the employee's supervisor as described in 6.735.1.5.1 above which the employee finds unsatisfactory; or within fifteen (15) workdays if the supervisor has not responded, the employee may request in writing that his/her question be referred to the DEO for a written opinion. If so the employee will complete Form 8558, "Request for Opinion from the Deputy Ethics Official" (http://publish.no.irs.gov/FORMS/INTERNAL/PDF/63533I02.PDF) and submit the completed form to his/her supervisor to be forwarded to the DEO.

    2. On receipt of a written request pursuant to (a) above, the supervisor shall immediately contact the servicing Labor/Employee Relation office regarding the coordination for the proper referral of the DEO request. The supervisor shall review the request ensuring that it contains the required information (see Form 8558). Any questions regarding the needed information shall be immediately addressed to the servicing Labor/Employee Relations office.

    3. If the request does not contain the information as required on Form 8558, the supervisor shall immediately return the request to the employee, and explain what further information is required for the proper transmittal of the employee's request to the DEO.

    4. On receipt of an employee's written request that contains all the required information, the supervisor shall, with the assistance of the servicing Labor/Employee Relations office, prepare if needed, an attachment to the employees request addressing any management concern(s) regarding the employee's request.

  2. Within five (5) workdays of receipt of a completed DEO request from the employee the following should occur:

    1. The employee's supervisor shall refer the employee's question/request along with any management comments and/or background material to the servicing Labor/Employee Relations office for processing. The required information will be attached to a form 8557 by the supervisor for processing. (http://publish.no.irs.gov/FORMS/PDF/63531I02.PDF)

    2. The servicing Labor/Employee Relations office will, on receipt of a DEO request, immediately review the request, insuring that needed information is present and promptly forward the package to the Chief, Labor Relations of referral to National Office. The Form 8557 must be signed by the supervisor and then initialed by the LR Specialist and Chief, Labor Relations before being sent to the Associate Director, LR/ER Strategic Policy Office, Workforce Relations Division (OS:HC:R:P). The servicing Labor/Employee Relations office will see that the employee receives a copy of any management comments or attachments.

    3. The Associate Director, LR/ER Strategic Policy Office, shall refer the employee's question to the DEO within five (5) workdays of receipt. Upon completion of the DEO's review, the DEO's response will be forwarded to the employee who requested the opinion. Courtesy copies will be forwarded to the employee, the servicing Labor/Employee Relations office and the LR/ER Strategic Policy Office simultaneously.

  3. If the employee has submitted his/her question through the negotiated or agency grievance procedure, processing of the grievance will be held in abeyance as follows:

    1. If the employee's request for referral to the DEO is made subsequent to the filing of a grievance shall be held in abeyance at the first step of the streamlined grievance process (i.e., the second level).

    2. If the employee's request for referral to the DEO is made subsequent to the filing of a grievance, the grievance shall be held in abeyance at whatever step it is in.

    3. Within five (5) workdays of receipt by the employee of the DEO's opinion, the grievance shall resume directly at the disapproving official's stage or at the step of the grievance process where the grievance was held in abeyance, whichever is higher.

  4. Any time after thirty (30) workdays from the date the employee requests referral to the DEO, if the DEO has not responded, the grievance will, at the employee's option, resume at whatever stage the grievance was held in abeyance.

  5. An employee's request for referral to the DEO must be made prior to receipt of management's last step decision.

    1. Requests from employees that the supervisor and/or the servicing Labor/Employee Relations office believe should be addressed by the DEO may be forwarded to the DEO for consideration. Only questions which involve an interpretation of ethics laws or regulations and their application to matters of immediate personal interest to the employee should be forwarded. Processing of such managerial requests must comply with all the procedural requirements outlined above. Employees must be notified within the ten (10) workday time limit by the supervisor of this action.

6.735.1.5.3  (12-08-2008)
Questions about Negotiations for Prospective Employment

  1. Any employee who has a question of immediate personal interest regarding the propriety of merely discussing prospective employment arrangements with any person or organization other than the Internal Revenue Service (IRS), i.e., as an alternative to employment with the IRS, may communicate in writing directly with the DEO. Questions of this nature may be sent to the Associate Chief Counsel (General Legal Services), Ethics and General Government Law Branch (CC:GLS:EGG), 1111 Constitution Avenue, NW, Room 6404, Washington, DC 20224

  2. The employee's request must set forth the specific facts and circumstances and the particular discussions in which the employee wishes to engage. The request must also include a work telephone number where the employee may be reached if additional information in required. The DEO will honor employee's requests that the supervisor and other management officials not be informed of questions of this nature provided the question presented does not involve facts or allegations of employee misconduct which must be reported pursuant to law and regulation. Employee are entitled to rely on the opinion of the DEO with respect to the propriety of engaging in such prospective employment discussion. Referral of questions to the DEO concerning actual employment with the persons or organizations referenced above will be handled as indicated in 6.735.1.4.2 above.

6.735.1.6  (12-08-2008)
Seeking Employment Outside the Post-government Employment Restrictions

  1. Employees who are thinking about seeking a job outside the Government need to be aware of the legal requirements that apply to the process of looking for other work. These requirements are found in 5 CFR §263, Subpart F or the Standards of Ethical Conduct. Employees should familiarize themselves with this subpart because they may be required to disqualify themselves from participating in a matter. In addition, both current government and former employees should know about potential post-employment restrictions before they begin a non-government job. These laws are needed to safeguard public confidence in the integrity of Government employees by preventing actual and apparent conflicts of interest. Relevant seeking employment and post-employment statutes and regulations are found on the Ethics Link website at (http://counsel.web.irs.gov/EthicsLink). Employees should pay close attention to these requirements because they carry potential criminal and administrative sanctions.

6.735.1.7  (12-08-2008)
Financial Conflicts of Interest

  1. All employees are subject to the financial conflict of interest statute (18 USC §208), as implemented by the Standards of Ethical Conduct (5 CFR §2635 Subpart D). An employee is prohibited from personally and substantially participating in any particular matter in which, to the employee's knowledge, the employee or any person whose interests are imputed to the employee has a financial interest, if the particular matter will have a direct and predictable effect on that interest. 18 USC §208(a); 5 CFR §2635.402(a). Imputed financial interests include the interest of the employee's spouse; minor children; general partners; organizations in which he/she is serving as an officer, director, trustee, general partner, or employee; and persons with whom the employee is negotiating for or has an arrangement for prospective employment. 18 USC §208(a); 5 CFR §2635.402(b)(2).

  2. Employees who have such conflicts are required to disqualify themselves from participating in the particular matter in question, unless a regulatory exemption applies or a waiver has been granted. 5 CFR §2635.402(c). Disqualification is accomplished by taking appropriate steps, such as oral or written notification to subordinates, to ensure that the employee does not participate in the matter from which he is disqualified.

6.735.1.7.1  (12-08-2008)
Disqualification Procedures

  1. Employees who have or may have a financial interest in a work assignment (e.g., stock ownership in taxpayer under audit; employment negotiations with taxpayer's representative) must, complete a Form 6782, Certification of Direct or Indirect Interest in a "Work Assignment" and submit it to their supervisor for action. The Form is intended for use in determining whether an employee is disqualified from participating in a work assignment based on the conflict of interest restrictions of 18 USC §208 or the impartiality regulations of the Standards of Ethical Conduct, and in obtaining an individual waiver.

  2. A supervisor who has been notified of an employee's possible financial conflict of interest concerning an assignment shall take all steps necessary to ensure that the employee does not participate in or act on the assignment unless it has been determined that the employee's financial interests are exempt from the conflict of interest law, 18 USC §208. If an employee has not already submitted a Form 6782, the supervisor will instruct the employee to submit one. The supervisor will instruct the employee to retain responsibility for the case or work assignment in which he has a financial interest only if there is a regulatory of individual waiver, or the employee divests his/her interest, otherwise the supervisor will reassign the matter. The supervisor will certify his actions on the Form 6782, retain a file copy, give another copy to the employee and forward the original through channels as provided in Delegation Order No. 1-21.

6.735.1.7.2  (12-08-2008)
Employee Participating Despite Financial Interest in Work Assignment

  1. When an employee has a conflict of interest in a work assignment because of his/her financial interests, the employee cannot work on that assignment unless his/her financial interests are covered by a regulatory exemption (e.g., stock interest in a party is $15,000.00 or less) or the agency issues him/her an individual waiver under 18 USC §208(b)(1).

  2. Regulatory Exemptions: OGE has recognized that some financial interests are too remote or too inconsequential to affect the integrity of the services of the employee to which the prohibition applies and therefore it has issued regulations granting certain exemptions from the general prohibition (5 CFR §2640, Subpart B). Employees qualifying under these regulatory exemptions may work on particular matters even though they may have a financial interest in the particular matter. The most common exemptions allow employees to participate in:

    1. Any particular matter affecting holdings of a diversified mutual fund;

    2. Any particular matter affecting holdings of a sector mutual fund where the affected holdings are not invested in the sector in which the fund concentrated;

    3. Any particular matter affecting holdings of an employee benefit plan;

    4. Any particular matter affecting publicly traded securities when the aggregate value of the employee's holdings in the securities does not exceed $15,000.00, and

    5. Any particular matter of general applicability, such as rule-making, affecting publicly traded securities when the market value of the employee's holdings in any one affected entity does not exceed $25,000.00 and the holdings in all affected entities do not exceed $50,000.00.

  3. Where an employee's interest is not generally exempt, an individual waiver may nevertheless be appropriate.

  4. Waivers: Individual waivers are appropriate when the nature and size of the employee's financial interest and the nature of the work assignment make it unlikely that the integrity of the employee's official actions would be affected. Individual waivers are not routine and should only be sought where business dictates require. Officials with delegated authority to grant waivers based on a financial conflict of interest are listed in Commissioner Delegation Order No. 1-21, Authorization to Grant Case by Case Exemptions to the Financial Conflict of Interest Provision in 18 USC §208(a). Coordination with the Office of Government Ethics by the Associate Chief Counsel (General Legal Services) is required before a waiver may be issued (5 CFR §2640-303).

  5. If after reviewing an employee's Form 6782, "Certification of Director or Indirect Financial Interest in a Work Assignment," it appears to the supervisor that an individual waiver may be appropriate, the factors listed in 5 CFR §2640.301 should be considered in making a waiver recommendation. To obtain a waiver to permit the employee to work on the assignment, the employee's supervisor should submit a memorandum discussing the factors in 5 CFR §2640.301 with the Form 6782 to the official with authority to grant the waiver. That official will then forward the materials to GLS along with a memorandum advising of management's position on whether a waiver should be granted. GLS will review the materials and consult, as mandatory, with the Office of Government Ethics as to the appropriateness of issuing a waiver in the particular circumstance. GLS will then draft a memorandum to the official with delegated authority to grant the waiver either recommending execution or denial of waiver, and if a waiver is to be issued, GLS will draft a waiver for the official's signature.

  6. The official with authority to grant a waiver must provide a copy of the waiver or memo denying the waiver request to the employee, the employee's supervisor, and GLS. GLS will redact the waiver sot hat it may be made available to the OGE as required by regulation.


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