- 39.1.2 Government Ethics Programs
- 126.96.36.199 Government Ethics Matters in General
- 188.8.131.52 Widely Attended Gatherings
- 184.108.40.206 Conflicts of Interest
- 220.127.116.11.1 Financial Conflicts of Interest
- 18.104.22.168.1.1 Seeking Advice Regarding the Application of the Rules
- 22.214.171.124.1.2 Financial Conflicts of Interests under 18 U.S.C. 208
- 126.96.36.199.1.3 Regulatory Exemptions Pursuant to 18 U.S.C. 208(b)(2)
- 188.8.131.52.1.4 Individual Waivers Pursuant to 18 U.S.C. 208(b)(1)
- 184.108.40.206.1.5 Appearances of a Lack of Impartiality Pursuant to 5 C.F.R. part 2635, subpart E
- 220.127.116.11.2 Prior-Employment
- 18.104.22.168.3 Post-Employment
- 22.214.171.124.4 Seeking Employment
- 126.96.36.199 Coordination of Litigation Ethics Matters in Tax Court Cases
- 188.8.131.52 Public Financial Disclosure
- 184.108.40.206 Confidential Financial Disclosure
- 220.127.116.11.1 Review
Part 39. General Legal Services
Chapter 1. Professionalism and Government Ethics Programs
Section 2. Government Ethics Programs
The Associate Chief Counsel (GLS) acts as the Deputy Ethics Official for the agency under the Ethics in Government Act and provides advice on matters as to the propriety of acts involving IRS and Office of Chief Counsel employees and former employees, and acts involving practitioners under 18 U.S.C. Part I, Chapter 11; the Ethics in Government Act; Government-wide, Treasury, Service, and Counsel standards and rules of conduct or behavior; and Treasury Circular 230.
All government ethics matters shall be handled by the Ethics and General Government Law Branch of GLS.
A GLS Area Counsel office receiving a request for a legal opinion on a government ethics issue should forward the request within five business days of receipt to the Associate Chief Counsel (GLS) for response.
Questions relating to conflicts of interest or other ethical considerations of a former employee or an individual representing another before the Service will be referred to the Office of Associate Chief Counsel (GLS).
Inquiries concerning policies and procedures pertaining to an employee’s acceptance of free attendance at seminars, conferences, receptions, dinners, or similar events, when attendance would benefit the Service, should be addressed to Chief, Ethics and General Government Law Branch, Office of Associate Chief Counsel (General Legal Services). See CCDM 18.104.22.168, Widely Attended Gatherings, for guidance.
This subsection describes procedures related to conflicts of interest and appearances of a lack of impartiality. Additional information may be found at http://intranet.prod.irscounsel.treas.gov/EthicsLink/ .
These procedures apply to reporting one’s own financial conflicts and impartiality issues, as well as those of other employees who are working on matters that raise a potential conflict of interest or an appearance of a lack of impartiality. This subsection also summarizes the conflict of interest and impartiality rules under 18 U.S.C. § 208 and the Standards of Ethical Conduct for Employees of the Executive Branch, and the regulatory exemptions at 5 C.F.R. part 2640.
If an employee is given an assignment in which he or she has a financial interest, the employee should complete a Form 6782, Certification of Financial Interest in a Work Assignment, and file it with his or her immediate supervisor. The employee is not required to file a Form 6782 if his or her financial interest is one of the following:
A publicly traded security valued at $15,000 or less
A widely diversified mutual fund (unless the work assignment relates to the mutual fund itself and not an underlying holding
A sector mutual fund(s) valued at $50,000 or less (unless the mutual fund itself and not an underlying holding)
The Supervisor, through Associate or Division Counsel, may seek the advice of General Legal Services on the proper resolution of the conflict (e.g. reassignment, regulatory exemption, individual waiver, directed divestiture).
Questions regarding an employee’s own participation, or the participation of another Counsel employee, in a matter because of a conflict of interest, or an impartiality issue should be referred through the employee’s management chain to the Associate or Division Counsel. The Associate or Division Counsel may seek GLS advice on the appropriate course of action.
Questions regarding the participation of the Chief Counsel or the Deputies Chief Counsel in particular matters should be referred through the Associate or Division Counsel with responsibility over the matter to the Chief Counsel Front Office gatekeeper, who will coordinate with GLS as necessary.
Standards of professionalism and courtesy require that any question concerning a potential conflict of interest or impartiality issue involving another employee be raised in a confidential manner through supervisory channels and not be made the subject of speculation or rumor.
Absent the application of a regulatory exemption or the issuance of an individual waiver (discussed below), employees may not personally and substantially participate in any particular matter that will have a direct and predictable effect on the employee’s financial interests. 18 U.S.C. § 208(a); 5 C.F.R. §§ 2635.401-403.
A financial interest in a particular matter exists when an employee or a person whose financial interests are imputed to the employee has a stake in the matter’s outcome. Imputed financial interests include those held by the employee’s spouse, minor child, or general partner. The financial interests of other persons, including organizations or entities, are imputed to an employee if the employee serves as an officer, director, trustee, general partner, or employee of an organization or entity, or if the employee is negotiating with or has an arrangement concerning future employment with a person, organization, or entity.
Particular matters under 18 U.S.C. § 208(a) include deliberations, decisions, or actions focused on the interests of either a specific party or parties or of a discrete and identifiable class of persons (e.g. a particular industry). A particular matter need not involve specific parties and may include a broad range of Government activities such as judicial or administrative proceedings, applications, requests for ruling, or other determinations, as well as general activities such as rulemaking or the formulation of general policies.
A particular matter will have a direct effect on a financial interest if there is a close causal link between any action to be taken in the matter and any expected effect of the matter on the financial interest. It will have a predictable effect on a financial interest if there is a real as opposed to speculative possibility that the matter will affect the financial interest. The dollar amount of any gain or loss is immaterial.
The U.S. Office of Government Ethics (OGE) has the authority to issue regulatory exemptions to the prohibition of 18 U.S.C. § 208(a) if OGE determines that the financial interest is too remote or inconsequential to affect the integrity of the employee’s services. Specific regulatory exemptions are discussed below and may be found at 5 C.F.R. part 2640, subpart B.
Diversified Mutual Funds. A fund is diversified if it does not have a stated policy of concentrating its investments in any industry, business, single country other than the United States, or bonds of a single State within the United States.
An employee may participate in any particular matter that will have a direct and predictable effect on the underlying holdings of a diversified mutual fund.
Sector Mutual Funds. A sector fund is a mutual fund that concentrates its investments in an industry, business, single country other than the United States, or bonds of a single State within the United States.
An employee may participate in a particular matter affecting the underlying holdings of a sector fund if the employee’s interest in the sector fund does not exceed $50,000. To calculate the value of the holding, an employee must aggregate the market value of all effected sector funds.
An employee may participate in a particular matter affecting the underlying holdings of a sector fund if the affected underlying holdings are not part of the sector in which the fund concentrates.
Interests in Securities. An employee may participate in a particular matter involving specific parties that will affect the employee’s, his or her spouse’s or minor child’s interest in publicly traded securities if the value of the interest does not exceed $15,000.
An employee may participate in a particular matter of general applicability that will affect the employee’s, his or her spouse’s or minor child’s interest in publicly traded securities if the value of each affected interest does not exceed $25,000, and the total value of all affected interests does not exceed $50,000.
Employee Benefit Plans. An employee may participate in any particular matter affecting the underlying holdings of the Thrift Savings Plan.
An employee may participate in any particular matter affecting the underlying holdings of a pension plan established or maintained by a State government or any political subdivision of a State government for its employees.
An employee may participate in any particular matter affecting the underlying holdings of a diversified employee benefit plan provided the investments of the plan are administered by an independent trustee and the plan is not a profit-sharing or stock bonus plan.
An individual waiver is available where it is determined that a financial interest is not so substantial as to be deemed likely to affect the integrity of the employee’s services.
Requests for individual waivers should be submitted by Associate or Division Counsel to the Associate Chief Counsel (General Legal Services). The request should include the Form 6782 and a memorandum stating the facts which support the waiver. The Associate Chief Counsel (GLS) will prepare the waiver and consult with OGE, as required by OGE regulations.
Approving Officials for various Counsel employees are listed below:
The Associate Chief Counsel (GLS) has authority to issue waivers for all counsel employees, except Senior Executive Service (SES) employees. This authority has been delegated to the Deputies Associate Chief Counsel (GLS) and may not be redelegated.
The Deputy Chief Counsel (Operations) has authority to issue waivers for SES counsel employees except the Chief Counsel and the Deputy Chief Counsel (Technical)
The Chief Counsel has authority to issue waivers for the Deputies Chief Counsel.
Absent authorization, an employee should not participate in a specific party matter where the matter will have a direct and predictable effect on the financial interests of a member of his or her household, or where a person with whom he or she has a covered relationship is a party or a representative of a party to the matter if a reasonable person would question the employee’s impartiality.
An employee has a covered relationship with the following persons:
A person with whom the employee seeks a business, contractual or financial relationship other than a routine consumer transaction
A person who is a member of the employee’s household, or a relative with whom the employee has a close personal relationship
A person for whom the employee’s spouse, parent or dependent child is, to the employee’s knowledge, serving or seeking to serve as an officer, director, trustee, general partner, agent, attorney, consultant, contractor or employee
Any person for whom the employee has within the last year served as officer, director, trustee, general partner, agent, attorney, consultant, contractor, or employee
An organization, other than a political party, in which the employee is an active participant
The employee’s immediate supervisor may authorize the employee to participate despite the appearance of a lack of impartiality if he or she determines, in light of all relevant circumstances, that the Government’s interest in the employee’s participation outweighs the concern that a reasonable person may question the integrity of the agency’s programs and operations. The criteria for making the authorization determination are set forth in subpart E of the Standards of Standards of Ethical Conduct. 5 C.F.R. § 2635.502(d). Supervisors should consult with the Associate Chief Counsel (GLS) when issuing an authorization.
The above procedures should also be followed where an employee has a relationship, other than a covered relationship described above, with a person who has an interest in a matter before the Office of Chief Counsel, and a reasonable person with knowledge of all facts and circumstances would question the employee’s impartiality in participating in the matter.
This section states the Office policy concerning restrictions on attorneys employed by the Office who have previous knowledge of or involvement in matters including cases pending in the Office. Attorneys employed by the Office often have been previously employed. The possibility exists that attorneys might be assigned a matter with which they have has some previous involvement.
Division Counsel, Associates Chief Counsel, and supervisors should take necessary action to make certain that attorneys under their supervision do not participate in any matter in which they have been personally or substantially involved prior to their employment with the Office. Supervisors should consult GLS if there is a question of whether an attorney may have a conflict based on prior employment.
This section concerns the post employment statutory prohibitions under 18 U.S.C. § 207 and Treasury Circular 230 (31 U.S.C. § 10.25) that apply to former government employees. Additional information may be found at http://intranet.prod.irscounsel.treas.gov/EthicsLink/ .
Under 18 U.S.C. § 207(a)(1), a former government employee is permanently barred from knowingly making, with the intent to influence, any communication or appearance before an employee of the United States on behalf of another person on a particular matter involving specific parties in which the employee participated personally and substantially . 18 U.S.C. § 207(a)(1) and 5 C.F.R. § 2641.201.
Under 18 U.S.C. § 207(a)(2), a former government employee is barred for two years after government his service terminates from knowingly making, with the intent to influence, any communication or appearance before an employee of the United States on behalf of another person on a particular matter involving specific parties which was actually pending under the employee’s official responsibility during his last year of government service. This two-year restriction commences upon an employee's termination from Government service. 18 U.S.C. § 207(a)(2) and 5 C.F.R. § 2641.202.
Under 18 U.S.C. § 207(c), a former senior government employee may not, for one-year after his service in a senior position terminates may knowingly make, with the intent to influence, any communication to or appearance before an employee of the IRS or the Office of Chief Counsel. This restriction applies to virtually any matter regardless of any prior involvement by the former employee. 18 U.S.C. § 207(c) and 5 C.F.R. § 2641.204.
A senior employee includes Executive Level officials and any individual who is paid at a rate of basic pay equal to or greater than 86.5% of the rate for Level II of the Executive Schedule.
Treasury Department Circular No. 230 § 10.25 (31 C.F.R. § 10.25) governs the practice of former employees before the Service. A willful violation of these regulations may be a basis for disbarment or suspension from practice before the IRS.
An employee may not take official action on a matter which can affect the financial interests of an outside organization with which the employee is seeking, negotiating or has an arrangement for future employment. 18 U.S.C. § 208; 5 C.F.R. §§ 2635.601-606. The remedy is disqualification.
An employee would be considered to be seeking employment when:
The employee has made unsolicited communications to any prospective employer, or agent or intermediary, about employment (unless the employee just asked for a job application).
A prospective employer contacts an employee about possible employment and the employee did not reject the possibility of employment.
An employee is no longer considered to be seeking employment if:
The prospective employer rejects the possibility of employment and all discussions of possible employment have terminated, or
Two months have passed after the employee has made an unsolicited communication, provided that the employee has not received an indication of interest from the prospective employer.
Employees planning to seek employment in the immediate future may directly contact the Ethics and General Government Law Branch, Office of the Associate Chief Counsel (General Legal Services) for advice. Employees, however, must inform their supervisors when a disqualification from an official matter is required.
Questions relating to conflicts of interest or other ethical considerations of an individual representing another before a court, including the Tax Court, should be referred by Division Counsel to the Office of the Associate Chief Counsel (P&A). The Office of the Associate Chief Counsel (P&A) will coordinate with the Office of Associate Chief Counsel (GLS), as appropriate.
Employees in senior positions under a pay system other than the General Schedule, such has the Senior Executive Service or an agency pay schedule, must file a Standard Form SF 278, Public Financial Disclosure Report, when their position’s rate of basic pay is equivalent to or greater than 120% of the minimum rate for GS-15. A position’s rate of basic pay is the amount authorized for the lowest step of the position’s pay grade.
New entrant filers. New entrant filers are employees initially appointed to covered positions. They are required to file new entrant financial disclosure reports with the Deputy Ethics Official (DEO) within 30 days of appointment into a covered position, absent a filing extension.
Annual filers. Annual filers are employees who were in covered positions for more than 60 days in the preceding calendar year. Annual financial reports should be filed with the DEO no later than May 15 of each year, absent a filing extension.
Termination filers. Termination filers are employees leaving covered positions, including detailees. They are required to file a termination SF 278 report with the DEO within 30 days after leaving their covered position, absent a filing extension.
Notification. The Executive Resources Board is required to inform new entrant, termination, and annual filers of the requirement to file financial reports in a timely manner. Timely notification is imperative as filers are subject to a mandatory $200 late filing fee for any report filed more than 30 days after the due date, unless the DEO waives the late fee upon a determination that the delay in filing was caused by extraordinary circumstances which made the delay necessary.
Extensions. A filer who is unable to meet the filing deadline should submit a written request for an extension to the DEO as soon as possible before the filing deadline. A request must contain an explanation of why such an extension is requested. The DEO may, for good cause, grant one or more extensions totaling not more than 45 days. In certain extraordinary circumstances, the DEO may grant an additional 45-day extension. Since the deadlines are mandated by law, extensions will be granted only in exceptional circumstances. GLS approves or denies extension requests in writing.
Review. GLS staff performs an initial review of all SF 278 reports for technical completeness and conflicts of interest. Following the initial review, reports are forwarded to the Deputy Ethics Official for final review and certification. Review serves the following purposes:
To check for possible conflicts of interest or potential conflicts between the filer's official duties and the filer's financial interests
To check for outside interests that do not create actual or potential conflicts but which may give rise to impartiality concerns
To ensure that the SF 278 has been completed in accordance with legal requirements
To ensure that the filer has complied with other ethics requirements, e.g., obtaining prior approval of outside employment
If, upon reviewing an SF 278, the DEO concludes that there appears to be an actual or potential conflict of interest, the DEO will contact the filer. The DEO will then advise what remedial action, if any, is needed. Remedial action may include: a waiver of the conflict after the DEO has consulted with the Office of Government Ethics; disqualification from matters creating a conflict; resignation from a position with a non-federal business or other entity; establishment of a qualified trust; divestiture of a conflicting interest; and transfer, reassignment, or resignation. As a rule, remedial action shall be completed within 90 days from the date the filer was notified.
Following report certification, GLS will provide a copy of the certified report to the filer. The original certified report is kept by the Service-wide Ethics Program Operations (SEPO) office in Martinsburg, West Virginia. Reports shall be retained for six years after their receipt. After that time, reports are to be destroyed unless they are needed for an ongoing investigation.
The Office of Government Ethics (OGE) Form 450, Confidential Financial Disclosure Report, is required to be filed by certain officers and employees of the executive branch by regulations issued by the Office of Government Ethics found at Title 5 Code of Federal Regulations (CFR), Part 2634. The confidential financial disclosure complements public financial disclosure in avoiding financial conflicts of interest.
Confidential filers ("covered" positions) in Counsel include:
All GS-15 positions
All positions, regardless of grade, which have been delegated signature authority for tax and revenue rulings, accounting periods and methods, or for contracting warrants
Employees who participate personally and substantially in contracting/procurement; administering/monitoring federal grants, etc.; regulating or auditing non-federal entities; or other activities having a direct and substantial economic effect on the interests of a non-federal entity; or whose official duties require such disclosure in order to avoid a conflict of interest
All non-SES positions which have supervisory authority over a covered position
Any Special Government Employees
New entrants. An employee must file an OGE Form 450 with his/her immediate supervisor within 30 days of assuming a confidential filer position, absent an extension. A new entrant report covers the 12 months previous to the signature date on the report.
Annual reports. Incumbents in covered positions must file an annual OGE Form 450 with their immediate supervisor no later than February 15, absent an extension. Annual reports cover the previous calendar year.
Extensions. A filer within Counsel who is unable to meet the filing deadline should submit a written request for an extension to the DEO as soon as possible before the filing deadline. A request must contain an explanation of why such an extension is requested. The DEO may, for good cause, grant one or more extensions totaling not more than 90 days. GLS approves or denies extension requests in writing.
Notification. The Executive Resources Board is required to inform new entrant and annual OGE Form 450 filers of the requirement to file their reports in a timely manner.
OGE Optional Form 450-A. Eligible annual filers may file an abbreviated annual report OGE Optional Form 450-A, Confidential Certificate of No New Interests (Executive Branch), three out of every four years. On the fourth year (i.e., 2008, 2012, etc.), all annual filers must complete the OGE Form 450. To be eligible to file OGE Optional Form 450-A, an annual filer:
Must have on file a OGE Form 450 from the previous filing period,
Must not have changed jobs since filing the OGE Form 450, and
Must have no new reportable changes in financial interests.
Employees will submit their report to their first line supervisor who is responsible for conducting an initial review of the report. The reviewer will examine the report to ensure it is properly completed, ensure the date of receipt is noted, compare disclosures to filer’s duties in order to help the filer avoid conflicts of interest, take any remedial action necessary, and then sign the report at the "Supervisor/Other Intermediate Reviewer" signature line.
Once the first line supervisor has completed the review and signed the report as the reviewer, the report should be forwarded to the second line supervisor who will serve as the Final Reviewing Official. Following the review, the Final Reviewing Official will sign the report and provide it to the OGE 450 Point of Contact, who then forwards it to the Executive Resources Board, where it will be retained for six years. Both the first and second line supervisor may retain a copy of the report for their own reference in assigning duties. However, the retained copies must be protected from improper disclosure. See 5 C.F.R. 2634.604.
If information from the report submitted, or from other sources, indicates an actual or potential conflict of interest on the part of a filer, the employee concerned shall be given an opportunity to explain the conflict or apparent conflict. Any questions or requests for advice in resolving a conflict or apparent conflict shall be referred to the Associate Chief Counsel (General Legal Services).
All supervisors must periodically review all positions under their supervision to ensure that all positions that meet the filing criteria are properly identified, and to ensure that employees in positions that should not be designated as covered positions are not being required to file an OGE Form 450. Entries into and departures from covered positions will be reported to the Executive Resources Board through the OGE 450 Points of Contact.