6.575.1 IRS Recruitment, Relocation, Retention, and Extended Assignment Incentives 6.575.1.1 Program Scope and Objectives 6.575.1.1.1 Background 6.575.1.1.2 Authority 6.575.1.1.3 Roles and Responsibilities 6.575.1.1.4 Program Management and Review 6.575.1.1.5 Program Controls 6.575.1.1.6 General Definitions 6.575.1.1.7 Related Resources 6.575.1.2 Recruitment Incentives 6.575.1.2.1 Recruitment Incentive Definitions 6.575.1.2.2 IRS Recruitment Incentive Policy 6.575.1.2.3 Eligibility 6.575.1.2.4 Criteria for Consideration of a Recruitment Incentive 6.575.1.2.5 Approval of Recruitment Incentives 6.575.1.2.6 Responsibilities 6.575.1.2.7 Documentation 6.575.1.2.8 Determining the Amount of the Recruitment Incentive 6.575.1.2.9 Payment of a Recruitment Incentive 6.575.1.2.10 Service Agreement 6.575.1.2.11 Termination of a Service Agreement 6.575.1.2.12 Collection of Excess Payments 6.575.1.2.13 Relation to Other Incentives 6.575.1.2.14 Records, Review, Reports 6.575.1.2.15 Miscellaneous Provisions 6.575.1.3 Relocation Incentives 6.575.1.3.1 Relocation Incentive Definitions 6.575.1.3.2 IRS Relocation Incentive Policy 6.575.1.3.3 Criteria for Consideration of a Relocation Incentive 6.575.1.3.4 Approval of Relocation Incentives 6.575.1.3.5 Eligibility 6.575.1.3.6 Responsibilities 6.575.1.3.7 Documentation 6.575.1.3.8 Determining the Amount of the Relocation Incentive 6.575.1.3.9 Payment of a Relocation Incentive 6.575.1.3.10 Service Agreement 6.575.1.3.11 Termination of a Service Agreement 6.575.1.3.12 Collection of Excess Payments 6.575.1.3.13 Relation to Other Incentives 6.575.1.3.14 Records, Review, Reports 6.575.1.3.15 Miscellaneous Provisions 6.575.1.4 Retention Incentives 6.575.1.4.1 Retention Incentive Definitions 6.575.1.4.2 IRS Retention Incentive Policy 6.575.1.4.3 Criteria for Consideration of a Retention Incentive 6.575.1.4.4 Approval of Retention Incentives 6.575.1.4.5 Eligibility 6.575.1.4.6 Responsibilities 6.575.1.4.7 Documentation 6.575.1.4.8 Determining the Amount of the Retention Incentive 6.575.1.4.9 Payment of a Retention Incentive 6.575.1.4.10 Service Agreement 6.575.1.4.11 Termination of a Service Agreement 6.575.1.4.12 Continuation, Reduction, or Termination of a Retention Incentive with No Service Agreement 6.575.1.4.13 Relation to Other Incentives 6.575.1.4.14 Annual Recertification 6.575.1.4.15 Records, Review, Reports 6.575.1.4.16 Likely to Leave for a Different Position in the Federal Service 6.575.1.4.17 Miscellaneous Provisions 6.575.1.5 Extended Assignment Incentives 6.575.1.5.1 Extended Assignment Incentive Definitions 6.575.1.5.2 IRS Extended Assignment Incentive (EAI) Policy 6.575.1.5.3 Criteria for Consideration of Extended Assignment Incentive (EAI) 6.575.1.5.4 Approval of Extended Assignment Incentive (EAI) 6.575.1.5.5 Eligibility 6.575.1.5.6 Responsibilities 6.575.1.5.7 Documentation 6.575.1.5.8 Determining the Amount of the Extended Assignment Incentive 6.575.1.5.9 Payment of an Extended Assignment Incentive 6.575.1.5.10 Service Agreement 6.575.1.5.11 Termination of a Service Agreement 6.575.1.5.12 Relation to Other Incentives 6.575.1.5.13 Reports 6.575.1.5.14 Miscellaneous Provisions Part 6. Human Resources Management Chapter 575. Recruitment, Relocation, Retention, and Extended Assignment Incentives Section 1. IRS Recruitment, Relocation, Retention, and Extended Assignment Incentives 6.575.1 IRS Recruitment, Relocation, Retention, and Extended Assignment Incentives Manual Transmittal March 03, 2020 Purpose (1) This transmits the revised IRM 6.575.1, IRS Recruitment, Relocation, Retention, and Extended Assignment Incentives. Material Changes (1) This revised IRM incorporates the Program Scope and Objectives subsection as required by the Internal Management Documents (IMD) outlined in IRM 1.11.2, Internal Management Documents System, Internal Revenue Manual (IRM) Process. (2) IRM 6.575.1.2.1(3) is new and adds the term and meaning of “Newly appointed.” (3) IRM 6.575.1.2.9(3) added information about payment of recruitment incentive being subject to the aggregate limitation on pay. (4) IRM 6.575.1.2.10(3) added and clarified criteria required on a recruitment incentive service agreement. (5) IRM 6.575.1.2.14(1) added detailed information required for reporting recruitment incentives to Treasury. (6) IRM 6.575.1.2.15(2) added misconduct and Federal tax compliance screening information required for recruitment incentives. (7) IRM 6.575.1.3.1(4) added definition to clarify establishing a residence in the new geographic location. (8) IRM 6.575.1.3.2(1) clarified policy requirements to establish and maintain residency in the new geographic area for the duration of the service agreement. (9) IRM 6.575.1.3.5 clarified eligibility requirements. (10) IRM 6.575.1.3.10(2) clarified that an employee agrees to a specified period of employment with IRS at the new duty station in return for payment of a relocation incentive. (11) IRM 6.575.1.3.10(3) added a statement that an employee must sign a written service agreement before payment of a relocation incentive. (12) IRM 6.575.1.3.10(4) added and clarified criteria required on a relocation incentive service agreement. (13) IRM 6.575.1.3.14(1) added detailed information required for reporting relocation incentives to Treasury. (14) IRM 6.575.1.3.15(2) added misconduct and Federal tax compliance screening information required for relocation incentives. (15) IRM 6.575.1.4.1(2) added additional definitions specific to retention incentives. (16) IRM 6.575.1.4.2(3) added information on the restriction to offering and authorizing a retention incentive. (17) IRM 6.575.1.4.3(3) added information regarding the availability to provide for group retention incentives and the contact required between the Business Based Human Resources (BBHR) point of contact (POC) and the Human Capital Office (HCO), Worklife, Benefits and Performance (WBP) Division, Awards, Compensation and Leave Policy (ACLP) Branch. (18) IRM 6.575.1.4.9(1) added information on how retention incentives may be paid. (19) IRM 6.575.1.4.9(5) added information about payment of retention incentive being subject to the aggregate limitation on pay. (20) IRM 6.575.1.4.10 expanded on service agreement requirements and restrictions for retention incentives. (21) IRM 6.575.1.4.11(2) through (8) added and clarified information on terminating a service agreement for retention incentives. (22) IRM 6.575.1.4.12 added and clarified information on how to continue, reduce or terminate a retention incentive with no service agreement. (23) IRM 6.575.1.4.14(1) added clarification on the annual recertification process. (24) IRM 6.575.1.4.14(6) added deadline for BBHR POCs to complete the annual recertification process and result for failure to submit response. (25) IRM 6.575.1.4.14(7) added deadline for HCO, WBP, ACLP submission of recertification report to Treasury. (26) IRM 6.575.1.4.15(1) added detailed information required for reporting retention incentives to Treasury. (27) IRM 6.575.1.4.17(1) added misconduct and Federal tax compliance screening information required for retention incentives. (28) IRM 6.575.1.5(2) added additional information on Extended Assignment Incentive (EAI) coverage. (29) IRM 6.575.1.5.1 added definitions specific to EAI. (30) IRM 6.575.1.5.2(1) added information on how EAI may be authorized. (31) IRM 6.575.1.5.4 added EAI approval process. (32) IRM 6.575.1.5.6 added EAI responsibilities. (33) IRM 6.575.1.5.7 added EAI required documentation. (34) IRM 6.575.1.5.10 added and updated language regarding EAI service agreement requirements. (35) IRM 6.575.1.5.11(4) and (5) added and clarified EAI information on terminating a service agreement. (36) IRM 6.575.1.5.12 added information explaining restriction on paying out an EAI to an employee who is already receiving another incentive. (37) IRM 6.575.1.5.14 added miscellaneous provisions, such as aggregate limitations as well as misconduct and Federal tax compliance screening information required for an EAI. (38) Editorial changes are made throughout to update division and branch names, references, hyperlinks, and terminology. There were also changes to format to present the information in a user-friendly format. Effect on Other Documents This IRM supersedes IRM 6.575.1, IRS Recruitment, Relocation, Retention and Extended Assignments Incentives, dated September 24, 2013. Audience All Operating Divisions and Functions Effective Date (03-03-2020) Robin D. Bailey Jr. IRS Human Capital Officer 6.575.1.1 (03-03-2020) Program Scope and Objectives Purpose: This IRM provides Service-wide policy, standards, requirements, and guidance relating to IRS Recruitment, Relocation, Retention, and Extended Assignment Incentives. This IRM must be read and interpreted in accordance with pertinent law (5 USC), Government-wide regulations (5 CFR), Treasury Human Capital Issuance System (HCIS) Directives, and Office of Personnel Management (OPM) decisions. The material in this chapter is generally organized consistent with the order of regulations contained in 5 CFR 575. As required, this guidance may be supplemented periodically by interim policy guidance from the IRS Human Capital Office. Audience: Unless otherwise indicated, the policies, authorities, procedures, and instructions contained in this IRM apply to all operating division and functions. Members of the Senior Executive Service (SES) and non-SES employees are covered in this IRM. Bargaining unit employees should review negotiated agreement provisions relating to subjects in this IRM. Should any of these instructions conflict with a provision in the negotiated agreement, the agreement prevails. Policy Owner: IRS Human Capital Officer. Program Owner: WBP Division, ACLP Branch. Program Goals: This IRM is designed to provide IRS guidance relating to incentive regulations found in 5 CFR 575. 6.575.1.1.1 (03-03-2020) Background Recruitment, relocation, and retention incentives (3Rs) are compensation flexibilities available to help Federal agencies recruit and retain a world-class workforce. The 3Rs are administered under Title 5 of the United States Code (USC), Chapter 57, Sections 5753 and 5754 and 5 CFR part 575, subparts A, B and C. EAIs are also a compensation flexibility available to assist agencies in retaining experienced, well-trained employees in locations located in a territory or possession of the United States, the Commonwealth of Puerto Rico, or the Commonwealth of the Northern Mariana Islands for a longer period than the employee’s initial tour of duty. EAIs are administered under Title 5 of the USC, Chapter 57, Section 5757 and 5 CFR part 575, subpart E. 6.575.1.1.2 (03-03-2020) Authority Laws: USC at http://uscode.house.gov/ Title 5, Government Organization and Employees §5753 - Recruitment and relocation bonuses §5754 - Retention bonuses §5757 - Extended assignment incentive Regulations: Title 5, CFR at https://www.ecfr.gov/cgi-bin/ECFR?SID=48e607ea83e9e1153545d6fbe5a3c168&page=browse Part 575 - Recruitment, Relocation, and Retention Incentives; Supervisory Differentials; and Extended Assignment Incentives Subpart A - Recruitment Incentives Subpart B - Relocation Incentives Subpart C - Retention Incentives Subpart E - Extended Assignment Incentives Delegation of Authority: Delegation Order 6-23, Delegation of Authority to Accomplish Pay Administration, at IRM 1.2.45.20 Other: Consolidated Appropriations Act: (Consolidated Appropriations Act, 2016. Public Law No: 114-113 (12/18/2015), Division E-Financial Services and General Government Appropriations Act, 2016, Title I - Department of the Treasury (Treasury), Internal Revenue Service). Treasury Human Capital Issuances: HCIS Chapter 451 TN-15-006, Monetary Recognition and Employee Misconduct (Non-SES) dated December 15, 2014 at:https://thegreen.treas.gov/do/dashr/supportdocs/HCIS%20Non-Exec%20Monetary%20%20Recognition%20%20Employee%20Misconduct%20(12-15-14).pdfPDF HCIS Chapter 575.1 TN-15-001, Recruitment Incentive Plan dated October 21, 2014 at:https://thegreen.treas.gov/do/dashr/supportdocs/Recruitment%20Incentive%20Plan.pdfPDF HCIS Chapter 575.2 TN-15-002, Relocation Incentive Plan dated October 21, 2014 at:https://thegreen.treas.gov/do/dashr/supportdocs/Relocation%20Incentive%20Plan.pdfPDF HCIS Chapter 575.3 TN-15-003, Retention Incentive Plan dated October 21, 2014 at:https://thegreen.treas.gov/do/dashr/supportdocs/Retention%20Incentive%20Plan.pdfPDF HCIS Chapter 575.5 TN-05-002, Extended Assignment Incentive Plan dated March 25, 2005 at:https://thegreen.treas.gov/do/dashr/supportdocs/extended_assignment_incentive_plan_575.5.pdfPDF 6.575.1.1.3 (03-03-2020) Roles and Responsibilities The IRS Human Capital Officer is the executive responsible for: This IRM and overall Service-wide policy for the 3Rs and EAIs; and Certifying that all statutory and regulatory requirements have been met for all non-SES incentive requests. HCO, WBP, ACLP is responsible for: Developing and publishing content in this IRM; Providing technical support to the BBHR POCs with any questions on non-SES incentives; Conducting a technical review on all non-SES requests; Forwarding all requests for non-SES incentives to the IRS Human Capital Officer for certification and to the IRS Commissioner or appropriate Deputy Commissioner for approval; Monitoring service agreements to ensure the terms are fulfilled; Contacting Payroll and Personnel Systems (P&PS) to process any reductions or terminations of any incentives, as needed; Coordinating with the Office of Executive Services (OES) to perfect periodic reports on all incentives; and Maintaining appropriate suspense files on all non-SES incentives. HCO, OES is responsible for: Developing content relevant to SES incentives for this IRM; Serving as the functional point of contact (POC) for all SES incentives; Forwarding all requests for SES incentives to the Treasury Assistant Secretary for Management for approval; Coordinating with WBP, ACLP to perfect periodic reports on all incentives; and Maintaining appropriate suspense files for all SES incentives. HCO, Employment, Talent and Security (ETS) Division is responsible for recruitment and hiring. They partner with business units who are interested in pursuing a recruitment incentive before a prospective employee enters on board. HCO, Workforce Relations (WRD) Division, Labor Relations/Employee Relations (LR/ER) Operations Office provides guidance in areas such as discipline, adverse and performance cases, and misconduct and Federal Tax compliance. HCO, P&PS Division is responsible for: Initiating and ensuring that Personnel Action Requests (PARs) for all incentive requests, reductions, and terminations are processed timely and accurately; Providing a copy of the documentation to the BBHR POC and sending a copy to the Official Personnel Folder (OPF) Consolidated Site to be filed in the employee’s OPF; and Generating and providing periodic reports to HCO, WBP, ACLP and OES on the 3Rs paid. The BBHR POC is responsible for: Reviewing and perfecting each incentive request; Obtaining clearance through their business unit finance office that funds are available; Obtaining signature of the business unit head of office, deputy head of office, or the equivalent official; Forwarding the request to HCO, WBP, ACLP for non-SES, and the HCO, OES for SES; Contacting HCO, P&PS to request the PAR be created and processed for all incentives; and Contacting HCO, WBP, ACLP in the event there are any changes to an existing incentive due to failure to fulfill service agreement requirements. A manager is responsible for: Recommending payment of an incentive ensuring government resources are used efficiently and effectively, with minimum potential for waste, fraud, and mismanagement; Administering and counseling employees on incentives rules, regulations, and procedures, in accordance with applicable laws, regulations, and established policies; Ensuring appropriate documentation for incentives are completed, approved, and submitted to the BBHR POC; Contacting the BBHR POC if there are any changes to an existing incentive due to failure to fulfill service agreement requirements; and Initiating a timely PAR to terminate the amount of an incentive where a service agreement was terminated. An employee is responsible for being aware of incentive rules, regulations, and procedures, in accordance with applicable laws, regulations, and established policies. 6.575.1.1.4 (03-03-2020) Program Management and Review Program Reports and Effectiveness: This IRM provides policy guidance on the 3Rs and EAIs for IRS. HCO, WBP gauges effectiveness of the incentive policies based on feedback from customers and program owners about subjects contained in this IRM, and sections may be revised, added, or deleted based in part on this process. HCO, WBP plays an integral role in program management, review, and effectiveness by: Supporting HCO, P&PS to deliver incentive payments through timely and accurate processing of incentive request forms; Supporting HCO, WRD to establish IRS labor and employee relations policy on incentives so they can provide related support and expertise to Service management, field and embedded labor/employee relations staff, and all employees; and Coordinating with HCO, OES to provide accurate reports on incentive expenditures to leadership. 6.575.1.1.5 (03-03-2020) Program Controls HCO, WBP develops and deploys policies, materials, and programs to increase Service-wide awareness and understanding of incentive programs, and collaborates with other HCO organizations and Service-wide stakeholders to support education and outreach activities as they relate to incentive programs. The following activities help ensure program success: Conducting annual policy reviews; Maintaining accurate and up-to-date program websites; Providing policy guidance to stakeholders; Publishing educational materials, such as Frequently Asked Questions (FAQs) and Fact Sheets; and Maintaining and sharing periodic expenditures reports. Before receiving an incentive, employees will be subject to misconduct and Federal tax compliance screenings in accordance with the Appropriations Act and IRS procedures, which prohibits using appropriated funds to pay employee incentives without considering the employee’s conduct and Federal tax compliance. Details can be found in IRM 6.451.1.23, Employee Performance and Utilization, Misconduct Screening and Tax Compliance athttp://irm.web.irs.gov/Part6/Chapter451/Section1/IRM6.451.1.aspx#6.451.1.23. 6.575.1.1.6 (03-03-2020) General Definitions The definitions used in this chapter are consistent with those contained in 5 CFR 575. Additional definitions are found in each subsection, as relevant. Competencies are the knowledge, skills, abilities, behaviors, and other characteristics an individual needs to perform the duties of the position. Rate of basic pay is defined under 5 CFR 575. It means the rate of basic pay fixed by law or administrative action for the position to which an employee is or will be appointed, relocated, or retained before deductions and including any special rate under 5 CFR part 530, subpart C, or similar payment under other legal authority, and any locality-based comparability payment under 5 CFR part 531, subpart F, or similar payment under other legal authority, but excludes additional payments of any other kind. Service Agreement is defined as a written agreement between IRS and an employee under which the employee agrees to a specified period of employment of not less than six months or more than four years with IRS in return for payment of an incentive. 6.575.1.1.7 (03-03-2020) Related Resources Additional guidance regarding IRS incentive programs is available on the HCO website at: http://hco.web.irs.gov/CompBenefits/compleave/3RIncentives.asp. The information supplements this chapter. To provide more detailed references, hyperlinks are included to supporting documents and additional information. OPM Fact Sheets: Pay & Leave, Recruitment, Relocation & Retention Incentives Fact Sheets at:https://www.opm.gov/policy-data-oversight/pay-leave/recruitment-relocation-retention-incentives/#url=Fact-Sheets Pay & Leave, Pay Administration, Fact Sheet: Extended Assignment Incentives at:https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/fact-sheets/extended-assignment-incentives/ 6.575.1.2 (09-24-2013) Recruitment Incentives This section establishes IRS policy and procedures for administering the recruitment incentive authority. The provisions of this policy apply to all newly appointed employees within IRS, including the following positions approved by OPM at the request of Treasury: The position of National Taxpayer Advocate, IRS, appointed and compensated under section 7803(c)(I)(B) of the Internal Revenue Code of 1986, as amended by Section 1301(c) of the Taxpayer First Act of 2019. OPM approved coverage on August 8, 1998. A position appointed and compensated under the IRS broadbanding system as established by the IRS Restructuring and Reform Act (IRSRRA) of 1998, and 5 USC 9509, as provided under OPM’s Criteria for IRS Broadbanding System, effective December 19, 2000. 6.575.1.2.1 (03-03-2020) Recruitment Incentive Definitions The definitions used in this subsection are in addition to those listed in IRM 6.575.1.1.6, and are consistent with those contained in 5 CFR 575.102 and Treasury Human Capital Issuance, HCIS Chapter 575.1 TN-15-001. Likely to be difficult to fill means IRS is likely to have difficulty recruiting qualified candidates with the competencies required for a position or group of positions in the absence of a recruitment incentive. IRS must consider the factors in 5 CFR 575.106(b), as applicable to the case at hand, to determine whether a position is likely to be difficult to fill. Newly appointed refers to: The first appointment, regardless of tenure, as an employee of the Federal Government; An appointment of a former employee of the Federal Government following a break in Federal Government service of at least 90 days; or An appointment of an individual in the Federal Government when their service in the Federal Government during the 90-day period immediately preceding the appointment was not in a position excluded by 5 CFR 575.104, and was limited to one or more of the following: A time-limited appointment in the competitive or excepted service; A non-permanent appointment in the competitive or excepted service; Employment with the Government of the District of Columbia (DC) when the candidate was first appointed by the DC Government on or after October 1, 1987; An appointment as an expert or consultant under 5 USC 3109 and 5 CFR part 304; Employment under a provisional appointment designated under 5 CFR 316.403; Employment under an Internship Program appointment under 5 CFR 213.3402(a); or Employment as an SES limited term appointee or limited emergency appointee (as defined in 5 USC 3132(a)(5) and (a)(6), respectively). 6.575.1.2.2 (09-24-2013) IRS Recruitment Incentive Policy A recruitment incentive may be authorized on a case-by-case basis to a newly appointed employee when the employee’s position is likely to be difficult to fill in the absence of the incentive. The approving official must make the determination to pay a recruitment incentive before the prospective employee enters on duty in the position for which recruited. The regulations contained in 5 CFR part 575, subpart A, provide for approval of recruitment incentives for a group or category of employees if the IRS determines that a position or group of positions have been difficult to fill in the past or may be difficult to fill in the future. The BBHR POC must initiate contact with HCO, WBP, ACLP for technical advice prior to finalizing a formal request for group recruitment incentives. All requests for group incentives must be coordinated between business units having like or similar occupations, regardless of grade levels. The category or group of positions must be narrowly defined to include: occupational series, grade level, distinctive job duties, unique competencies required for the positions, and geographic location. Changes to an approved group request (e.g., increase in number of incentives or hard-to-fill locations) will require additional written approval. The requesting office must review each decision to target a group of similar positions for the purpose of offering a recruitment incentive at least annually to determine whether the positions are still likely to be difficult to fill and certify this determination in writing. If a determination is made that the positions are no longer likely to be difficult to fill, a recruitment incentive may not be offered to newly-appointed employees in that group on a group basis. HCO, WBP, ACLP, will notify the Treasury, Deputy Assistant Secretary for Human Resources and Chief Human Capital Officer of approved group recruitment incentives, including the positions covered, service period, amount of payment, and effective date of the incentive. 6.575.1.2.3 (03-03-2020) Eligibility To be eligible to receive a recruitment incentive, an employee must: Be a newly appointed employee; and Sign a service agreement to remain an employee of IRS for a period of six months to four years as established by the approving official based on the needs of IRS. While service agreement time frames vary, a one-year period is recommended for entry level positions. A recruitment incentive may not be paid to ineligible employees as defined in 5 CFR 575.104, which include individuals appointed by the President, by and with the advice and consent of the Senate, or a position in the SES as a non-career appointee (as defined in 5 USC 3132(a)(7)). 6.575.1.2.4 (09-24-2013) Criteria for Consideration of a Recruitment Incentive IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to determine when a position is likely to be difficult to fill (e.g., the IRS is likely to have difficulty recruiting candidates with the competencies required for the position or group of positions in the absence of a recruitment incentive). The following factors must be considered, as applicable to the case at hand, in determining whether a position or group of positions is likely to be difficult to fill in the absence of the incentive and in documenting this determination (5 CFR 575.106): The availability and quality of candidates possessing the competencies required for the position, including the success of recent efforts to recruit candidates for the position or similar positions using indicators, such as offer acceptance rates, the proportion of positions filled, and the length of time required to fill similar positions; The salaries typically paid outside the Federal Government for similar positions; Recent turnover in similar positions; Employment trends and labor-market factors that may affect our ability to recruit candidates for similar positions; Special or unique competencies required for the position; Efforts to use non-pay authorities, such as special training and work scheduling flexibilities, to resolve difficulties alone or in combination with a recruitment incentive; The desirability of the duties, work or organizational environment, or geographic location of the position; and Other supporting factors. IRS may determine that a position or group of positions is likely to be difficult to fill if OPM has approved the use of a direct-hire authority applicable to the position or group of positions under 5 CFR 337, subpart B. 6.575.1.2.5 (09-24-2013) Approval of Recruitment Incentives The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to approve a recruitment incentive. The Treasury Assistant Secretary for Management is the approving official for payment of a recruitment incentive to a member of the SES, or non-SES employees selected for an SES position, other than one for whom appointing authority is reserved to the Treasury Deputy Secretary. The Commissioner, the Deputy Commissioner for Services and Enforcement, and the Deputy Commissioner for Operations Support are the approving officials for the payment of a recruitment incentive for employees within his or her respective organization. This authority may not be redelegated. (See Delegation Order 6-23, Delegation of Authority to Accomplish Pay Administration, at IRM 1.2.45.13(62)) The recommending official must be at least one level higher than the employee's supervisor unless there is no higher official within the IRS. The approving official must review and approve the recruitment incentive request in writing before the new employee enters on duty. 6.575.1.2.6 (09-24-2013) Responsibilities The recruiting manager recommends payment of a recruitment incentive through the second-level manager after determining a position is likely to be difficult to fill. The requesting office completes and signs the Recruitment Incentive Request Form 14118-I for non-SES employees, or the Recruitment Incentive Template for SES employees or non-SES employees selected for an SES position. Requests for non-SES employees are routed to the BBHR POC, and requests for SES employees are routed to the functional POC. The BBHR POC or functional POC: Reviews the request; Obtains clearance through their business unit finance office that funds are available; Obtains signature of the business unit head of office, deputy head of office, or the equivalent official, and; Forwards the request to HCO, WBP, ACLP for non-SES, and HCO, OES for SES. HCO, WBP, ACLP will conduct a technical review on non-SES requests and HCO, OES will conduct a technical review on SES requests. The IRS Human Capital Officer will certify that all statutory and regulatory requirements have been met. The requests for non-SES will be forwarded to the Commissioner or appropriate Deputy Commissioner for approval, and the requests for SES will be forwarded to the Treasury Assistant Secretary for Management for approval. HCO, P&PS creates and processes the PAR and sends a copy of the documentation to the OPF Consolidated Site to be filed in the employee’s OPF. HCO, P&PS will generate periodic reports on recruitment incentives at the request of HCO, WBP, ACLP. HCO, WBP, ACLP is responsible for overall program administration, policy guidance, and reporting requirements. 6.575.1.2.7 (09-24-2013) Documentation For each determination to pay a recruitment incentive, the following must be documented in writing on the Recruitment Incentive Request Form 14118-I for non-SES employees, or the Recruitment Incentive Template for SES employees or non-SES employees selected for an SES position: The basis for determining that a position is likely to be difficult to fill as determined under IRM 6.575.1.2.4; The basis for authorizing a recruitment incentive; The basis for establishing the amount and timing of the incentive payment and the length of the required service period; and If applicable, the basis for making a determination to pay a recruitment incentive to a prospective employee before they enter on duty in the position for which recruited (the employee must have received a written offer of employment and signed the service agreement). 6.575.1.2.8 (09-24-2013) Determining the Amount of the Recruitment Incentive The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to establish criteria for determining the amount of a recruitment incentive. For SES, the maximum amount authorized for a recruitment incentive is 25 percent of an employee’s annual rate of basic pay at the beginning of the service period multiplied by the number of years (including fractions of a year) in the service period (not to exceed four years). For non-SES, the parameters established in the IRS Non-SES Corporate Incentives Strategy at http://hco.web.irs.gov/compbenefits/pdf/IRSNon-SESCorporateIncentivesStrategy.ppt must be referenced and utilized. The following factors must be considered when determining the amount of the recruitment incentive: The criticality of the skills or special mission requiring the service of a specific executive, manager, employee, or group of employees; The cost effectiveness of granting a recruitment incentive relative to the cost of further recruitment (e.g., training, lost productivity, attrition rate, and other applicable alternatives and considerations); and The availability of funds. IRS may, through Treasury’s Office of the Deputy Assistant Secretary for Human Resources/Chief Human Capital Officer (DASHR/CHCO), request OPM approval to waive the 25 percent limitation for non-SES and SES employees based on a critical agency need. The requesting office must determine that the competencies required for the position(s) are critical to the successful accomplishment of an important agency mission, project, or initiative (e.g., programs or projects related to a national emergency or implementing a new law or critical management initiative). With an approved waiver, the total amount of recruitment incentive payments paid to a non-SES or SES employee in a service period may not exceed 50 percent of the employee’s annual rate of basic pay at the beginning of the service period multiplied by the number of years in the service period. However, in no event may a waiver provide total recruitment incentive payments exceeding 100 percent of the employee’s annual rate of basic pay at the beginning of the service period. A written waiver request must include all of the information required in 5 CFR 575.109(c)(2). 6.575.1.2.9 (03-03-2020) Payment of a Recruitment Incentive A recruitment incentive may be paid: As an initial lump-sum payment at the commencement of the service period required by the service agreement or before the start of the service period to an employee who has not yet entered on duty once the employee has received a written offer of employment and signed a service agreement; In installments throughout the service period required by the service agreement; As a final lump-sum payment upon the completion of the full service period required by the service agreement; or In a combination of these payment methods. A recruitment incentive is not part of an employee’s rate of basic pay for any purpose. Payment of a recruitment incentive is subject to the aggregate limitation on pay under 5 USC 5307 and 5 CFR part 530, subpart B. A recruitment incentive will not be included in the calculation of a lump-sum payment for annual leave. 6.575.1.2.10 (03-03-2020) Service Agreement The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to establish criteria for determining the length of a service period. A service agreement is a written agreement between IRS and an employee under which the employee agrees to a specified period of employment in return for the payment of a recruitment incentive. Before the IRS may pay a recruitment incentive, an employee must sign a written service agreement to complete a specified period of employment with IRS. The minimum service agreement may not be for less than six months; the maximum service agreement may not be for more than four years. The service agreement must: Meet the requirements of, and contain the information specified in 5 CFR 575.110; Include the commencement and termination dates of the required service period; Specify the total amount of the incentive, the method of paying the incentive, and the timing and amount of each incentive payment, as established under 5 CFR 575.109; Include the conditions under which IRS must terminate the service agreement (i.e., if an employee is demoted or separated for cause, receives a rating of record of less than ‘‘Fully Successful’’ or equivalent, or otherwise fails to fulfill the terms of the service agreement) and the conditions under which the employee must repay a recruitment incentive under 5 CFR 575.111; and The effect of a termination, including the conditions under which the IRS will pay an additional recruitment incentive payment for partially completed service. If service does not begin on the first day of a pay period, the approving official must delay the service period commencement date so that the required service period begins on the first day of the first pay period beginning on or after the commencement of service with IRS. The approving official may delay a service agreement commencement date until after the employee completes an initial period of formal training or required probationary period when continued employment in the position is contingent on successful completion of the formal training or probationary period. The service agreement must specify that if the employee does not successfully complete the training or probationary period before the service period commences, the IRS is not obligated to pay any portion of the recruitment incentive. A service agreement form is provided as part of Form 14118-I Request for Recruitment Incentive for non-SES employees and as part of the Recruitment Incentive Template Requests for SES employees or non-SES employees selected for an SES position. 6.575.1.2.11 (09-24-2013) Termination of a Service Agreement The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to establish criteria for terminating a service agreement. The officials authorized to approve the payment of a recruitment incentive are also authorized to terminate the recruitment incentive service agreement. IRS may unilaterally terminate a recruitment incentive service agreement based solely on management needs (5 CFR 575.111(a)). If the decision is made to unilaterally terminate a recruitment incentive service agreement, the employee is entitled to all the recruitment incentive payments for completed service and to retain any portion of the recruitment incentive payment he or she received that is attributable to uncompleted service. IRS must terminate a recruitment incentive service agreement as prescribed under 5 CFR 575.111(b) if the employee: Is demoted or separated for cause (i.e., for unacceptable performance or conduct); Receives a rating of record of less than “Fully Successful” or equivalent; or Otherwise fails to fulfill the terms of the service agreement. If IRS terminates a recruitment incentive service agreement based on these reasons, the following rules apply: The employee is entitled to retain the recruitment incentive payments previously paid that are attributable to the completed portion of the service period. If the payments received are less than the amount that would be attributable to the completed portion of the service period, or if the payments are more than the amount that would be attributable to the completed portion of the service period, IRS must follow the requirements in 5 CFR 575.111(f) to determine its obligations for payment or the employee’s obligations for repayment. Note: An employee is not entitled to retain any portion of the recruitment incentive and must repay all payments received when the employee is separated as a result of material false or inaccurate statements, deception or fraud in examination or appointment, or fails to meet employment qualifications. Additionally, repayment of recruitment incentives received as a result of these factors are not subject to a repayment waiver. IRS must notify an employee in writing when it terminates a recruitment incentive agreement and provide the reason(s) for the termination. The relevant business unit must initiate a timely PAR to terminate the amount of a recruitment incentive. The termination of a service agreement and payment of the incentive is not grievable or appealable as prescribed under 5 CFR 575.111(c). 6.575.1.2.12 (09-24-2013) Collection of Excess Payments If an employee fails to fulfill his or her obligations for repayment, IRS must recover any outstanding incentive repayment amount from the employee consistent with IRS's policies and procedures for collection by offset from an indebted Government employee under 5 U.S.C. 5514 and 5 CFR Part 550, subpart K, or the appropriate provisions governing Federal debt collection if the individual is no longer a Federal employee (5 CFR 575.111(g)). Authorized officials may waive the requirement to repay the full amount owed under IRM 6.575.1.2.11.54(b) when, in the judgment of the official, collection of the excess amount would be against equity and good conscience and not in the best interest of the United States (5 CFR 575.111(h)). Any waivers must be consistent and in accordance with the provisions of Treasury Directive 34-01, Waiving Claims Against Treasury Employees for Erroneous Payments, and IRM 1.2.40.14, Delegation Order 1-15, Waiving Claims Against Current or Former Employees for Erroneous Payments. 6.575.1.2.13 (03-03-2020) Relation to Other Incentives IRS may not begin paying a recruitment incentive to an eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of a relocation incentive under 5 CFR 575.206, or for a retention incentive under 5 CFR 575.306, or to an eligible employee who is receiving a retention incentive without a service agreement (5 CFR 575.105(c)). IRS may not begin paying an extended assignment incentive to an eligible employee who is receiving or fulfilling the requirements of a recruitment incentive (5 CFR 575, 506). 6.575.1.2.14 (03-03-2020) Records, Review, Reports HCO, WBP, ACLP will: Maintain a record of each determination to pay a recruitment incentive; and Complete and submit a written report to Treasury on recruitment incentives use during the previous calendar year. The report must include: A description of how the authority to pay recruitment incentives was used; The number and dollar amount of the recruitment incentives paid for each employee including the title of their position, pay plan, occupational series, grade/step rate (or equivalent), and commencement date of the incentive; and Other information, records, reports, metrics, and data OPM and/or DASHR/CHCO may prescribe. 6.575.1.2.15 (03-03-2020) Miscellaneous Provisions Aggregate Limitation: Payment of a recruitment incentive is subject to the aggregate limitation on pay under 5 USC 5307, 5 CFR Part 530, subpart B and IRM 6.530.1.2, Aggregate Limitation on Pay, as follows: SES: The total annual compensation (including a recruitment, relocation, or retention incentive payment) for SES cannot exceed the rate payable to the Vice President under 3 USC 104 during periods when OPM and Office of Management and Budget (OMB) certification of Treasury’s SES performance appraisal system is in effect and cannot exceed the rate of pay for level I of the Executive Schedule during periods when OPM and OMB certification of Treasury’s SES performance appraisal system has lapsed as follows: During periods when certification is in effect: If an incentive would cause an employee’s total annual compensation to exceed the Vice President’s rate of pay, the IRS must defer the excess amount for payment as a lump-sum payment to the beginning of the following calendar year. During periods when certification has lapsed: If an incentive payment would cause an employee’s total annual compensation to exceed the rate of pay for level I of the Executive Schedule, the IRS must: (1) defer the excess amount until OPM and OMB certify Treasury’s SES performance appraisal system, at which time the IRS may pay the excess amount up to the rate payable to the Vice President and defer any remaining amount for payment as a lump-sum payment at the beginning of the following calendar year; or (2) defer the entire excess amount for payment as a lump-sum payment at the beginning of the following calendar year, if OPM and OMB do not certify Treasury’s SES performance appraisal system before the end of the current calendar year. The limitations described above also apply to employees in senior-level (SL) positions and scientific and professional (ST) positions who are paid under 5 USC 5376. Other Employees: Total annual compensation (including a recruitment, relocation, or retention incentive payment) cannot exceed the rate of pay for level I of the Executive Schedule in any calendar year. Excess incentive payments that would cause the employee’s total annual compensation to exceed the aggregate limitation must be deferred and paid in a lump-sum payment at the beginning of the following calendar year as provided under 5 CFR 530.203(d) and 530.204. Before receiving a recruitment incentive, employees will be subject to misconduct and Federal tax compliance screening, in accordance with the Appropriations Act and IRS procedures, which prohibit using appropriated funds to pay employee incentives without considering the employee’s conduct and Federal tax compliance. Details can be found in IRM 6.451.1.23, Employee Performance and Utilization, Misconduct Screening and Tax Compliance at http://irm.web.irs.gov/Part6/Chapter451/Section1/IRM6.451.1.aspx#6.451.1.23. 6.575.1.3 (09-24-2013) Relocation Incentives This section establishes IRS policy and procedures for administering the relocation incentive authority. The provisions of this policy apply to employees as defined under 5 USC 5753 and 5 CFR 575.202 and 575.203 within IRS, plus the following positions approved by OPM at the request of Treasury: The position of National Taxpayer Advocate, IRS, appointed and compensated under Section 7803(c)(I)(B) of the Internal Revenue Code of 1986, as amended by Section 1301(c) of the Taxpayer First Act of 2019. OPM approved coverage on August 8, 1998. A position appointed and compensated under the IRS broadbanding system as established by the IRS Restructuring and Reform Act (IRSRRA) of 1998, and 5 USC 9509 as provided under OPM’s Criteria for IRS Broadbanding System, effective December 19, 2000. 6.575.1.3.1 (03-03-2020) Relocation Incentive Definitions The definitions used in this subsection are in addition to those listed in IRM 6.575.1.1.6, and are consistent with those contained in 5 CFR 575.202 and Treasury Human Capital Issuance, HCIS Chapter 575.2 TN-15-002. Likely to be difficult to fill means the IRS is likely to have difficulty recruiting employees with the competencies required for the position or group of positions in the absence of a relocation incentive. IRS must consider the factors in 5 CFR 575.206(b), as applicable to the case at hand, to determine whether a position is likely to be difficult to fill. Position in a different geographic area is a position that is considered to be in a different geographic area if the worksite of the new position is 50 or more miles from the worksite of the position held immediately before the move. If the worksite of the new position is less than 50 miles from the worksite of the position held immediately before the move, but the employee must relocate (i.e., establish a new residence) to accept the position, the approving official may waive the 50-mile requirement and pay the employee a relocation incentive. Establish a residence in the new geographic location includes, but is not limited to, purchasing or renting of a home, apartment, or condominium; residing at a residence of a friend or family member; or temporarily residing at a hotel. 6.575.1.3.2 (03-03-2020) IRS Relocation Incentive Policy IRS may pay a relocation incentive to an employee who: Relocates to a different geographic area (permanently or temporarily) to accept an eligible position when the position is likely to be difficult to fill in the absence of a relocation incentive, as determined under 5 CFR 575.206; Establishes and maintains residency in the new geographic area for the duration of the service agreement, as outlined in IRM 6.575.1.3.10; and Is an employee of the Federal Government immediately before the relocation. A relocation incentive may be paid only when the employee’s rating of record for the position held immediately before the move is at least ‘‘Fully Successful’’ or equivalent or higher. To continue to receive a relocation incentive, an eligible employee must continue to have a rating of at least “Fully Successful” or equivalent or higher during the service period. 6.575.1.3.3 (09-24-2013) Criteria for Consideration of a Relocation Incentive The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to determine when a position is likely to be difficult to fill. The following factors must be considered, as applicable to the case at hand, in determining whether a position or group of positions is likely to be difficult to fill in the absence of a relocation incentive: The availability and quality of candidates possessing the competencies required for the position, including the success of recent efforts to recruit candidates for the position or similar positions using indicators, such as offer acceptance rates, the proportion of positions filled, and the length of time required to fill similar positions; The salaries typically paid outside the Federal Government for similar positions; Recent turnover in similar positions; Employment trends and labor-market factors that may affect the ability of IRS to recruit candidates for similar positions; Special or unique competencies required for the position; Agency efforts to use non-pay authorities, such as special training and work scheduling flexibilities, to resolve difficulties alone or in combination with a relocation incentive; The desirability of the duties, work or organizational environment, or geographic location of the position; and, Other supporting factors. IRS may determine that a position or group of positions is likely to be difficult to fill if OPM has approved the use of a direct-hire authority applicable to the position or group of positions under 5 CFR part 337, subpart B. The regulations provide for approval of a group relocation incentive. IRS may waive the required case-by-case authorization of a relocation incentive when: An employee is a member of a group of employees subject to a mobility agreement, and IRS determines that relocation incentives are necessary to retain the employees subject to the mobility agreement to ensure continuation of operations; or A major organizational unit of the IRS is relocated to a new duty station, and IRS determines that relocation incentives are necessary for a group of employees to ensure the continued operation of that unit without undue disruption of an activity or function that is deemed essential to the IRS’s mission or without undue disruption of service to the public. The BBHR POC must initiate contact with the HCO, WBP, ACLP Branch for technical advice prior to finalizing a formal request for group relocation incentives. The written determination of the basis to pay a relocation incentive must specify the group of employees covered by the case-by-case waiver, the conditions under which the waiver is approved, and the period of time the waiver is applied. The category or group of positions must be narrowly defined to include: occupational series, grade level, distinctive job duties, unique competencies required for the position, special project, function or activity, minimum service requirements, organization or team geographic location. HCO, WBP, ACLP will notify the DASHR/CHCO of approved group relocation incentives. The notification must include information on the positions covered, service period, amount of payment, and effective date of the incentive. 6.575.1.3.4 (09-24-2013) Approval of Relocation Incentives The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to approve a relocation incentive for an employee. The Treasury Assistant Secretary for Management is the approving official for payment of a relocation incentive to a member of the SES, or non-SES employees selected for an SES position, other than one for whom appointing authority is reserved to the Treasury Deputy Secretary. The Commissioner, the Deputy Commissioner for Services and Enforcement, and the Deputy Commissioner for Operations Support are the approving officials for the payment of a relocation incentive for employees within his or her respective organization. This authority may not be redelegated. (See Delegation Order 6-23, Delegation of Authority to Accomplish Pay Administration, at IRM 1.2.45.13(66)) The recommending official must be at least one level higher than the employee's supervisor, unless there is no higher official within the IRS. The approving official must review and approve the relocation incentive request in writing before the employee enters on duty in the new position to which relocated and before the incentive can be paid to the employee. 6.575.1.3.5 (03-03-2020) Eligibility To be eligible to receive a relocation incentive, an employee must: Be a Federal employee immediately before the relocation; Have a “Fully Successful” or equivalent or higher rating of record for the position held immediately before the move; Sign a service agreement (Form 14065-B for non-SES or Service Agreement Template for SES) to remain an employee of IRS, and maintain residency in the new geographic location for a minimum of six months not to exceed four years; Relocate to a position in a different geographic area, as outlined in IRM 6.575.1.3.1 (3); Establish residency in the new geographic area, as outlined in IRM 6.575.1.3.1 (4); Maintain residency in the new geographic area for the duration of the service agreement; and Not be fulfilling a service agreement for receipt of a previously approved recruitment or relocation incentive. Employees in positions listed in 5 CFR 575.204, which include Presidential appointees, non-career SES appointees, and employees in positions excepted from the competitive service by reason of their confidential, policy-determining, policy-making, and policy-advocating character (Schedule C), are not eligible for a relocation incentive. 6.575.1.3.6 (09-24-2013) Responsibilities The requesting manager recommends payment of a relocation incentive through the second-level manager. The requesting office completes and signs the Relocation Incentive Request Form 14064-B for non-SES employees, or the Relocation Incentive Template for SES employees or non-SES employees selected for an SES position. Requests for non-SES employees are routed to the BBHR POC and requests for SES employees are routed to the functional POC. The BBHR POC or functional POC: Reviews the request, Obtains clearance through their business unit finance office that funds are available; Forwards for signature by the business unit head of office, deputy head of office, or the equivalent official; and Forwards the request to HCO, WBP, ACLP for non-SES employees and the HCO, OES for SES employees. HCO, WBP, ACLP will conduct a technical review on non-SES requests and HCO, OES will conduct a technical review on SES requests. The IRS Human Capital Officer will certify that all statutory and regulatory requirements have been met. The requests for non-SES will be forwarded to the Commissioner or appropriate Deputy Commissioner for approval, and the requests for SES will be forwarded to the Treasury Assistant Secretary for Management. The HCO, P&PS creates and processes the PAR and sends a copy of the documentation to the OPF Consolidated Site to be filed in the employee’s OPF. HCO, P&PS will generate periodic reports on relocation incentives at the request of HCO, WBP, ACLP. HCO, WBP, ACLP is responsible for overall program administration, policy guidance, and reporting requirements. 6.575.1.3.7 (09-24-2013) Documentation For each determination to pay a relocation incentive, the following must be documented in writing on the Relocation Incentive Request Form 14064-B for non-SES employees, or the Relocation Incentive Template for SES employees or non-SES employees selected for an SES position: The basis for determining that a position or group of positions is likely to be difficult to fill as determined under IRM 6.575.1.3.3; The basis for authorizing a relocation incentive; The basis for establishing the amount and timing of the relocation incentive payment, and the length of the required service period; Facts supporting that the worksite of the employee’s new position is not in the same geographic area as the worksite of the position held immediately before the move (or that a waiver was approved under 5 CFR 575.205(b)); and Facts supporting that the employee established and maintains residency in the new geographic area as required by 5 CFR 575.205(b). 6.575.1.3.8 (03-03-2020) Determining the Amount of the Relocation Incentive The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to establish criteria for determining the amount of a relocation incentive. For SES, the maximum amount authorized for a relocation incentive is 25 percent of an employee’s annual rate of basic pay at the beginning of the service period multiplied by the number of years (including fractions of a year) in the service agreement. For non-SES, the parameters established in the IRS Non-SES Corporate Incentives Strategy at http://hco.web.irs.gov/compbenefits/pdf/IRSNon-SESCorporateIncentivesStrategy.ppt must be referenced and utilized. IRS may, through the DASHR/CHCO office, request OPM approval to waive the 25 percent relocation incentive payment limitation for non-SES and SES employees based on IRS’s critical need for a higher incentive payment amount consistent with the requirements in 5 CFR 575.209(c)(1). The total amount of the higher payment may not exceed 50 percent of the employee’s annual rate of basic pay at the beginning of a service period multiplied by the number of years (including fractions of a year) in the service period. The total relocation incentive payment may not in any event exceed 100 percent of the employee’s annual rate of basic pay at the beginning of the service period. A written waiver request must include all of the information required in 5 CFR 575.209(c)(2). 6.575.1.3.9 (09-24-2013) Payment of a Relocation Incentive A relocation incentive may be paid: As an initial lump-sum payment at the commencement of the service period required by the service agreement; In installments throughout the service period required by the service agreement; As a final lump-sum payment upon the completion of the full service period required by the service agreement; or In a combination of these payment methods. A relocation incentive will not be considered part of the employee's rate of basic pay for any purpose. Payment of a relocation incentive is subject to the aggregate limitation on pay under 5 USC 5307 and 5 CFR part 530, subpart B. A relocation incentive will not be included in the calculation of a lump-sum payment for annual leave. In all cases, an employee must establish residence in the new geographic area before IRS may pay a relocation incentive to the employee. A relocation incentive may be paid only if the employee maintains residency in the new geographic area for the duration of the service agreement. 6.575.1.3.10 (03-03-2020) Service Agreement The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to establish criteria for determining the length of a service period. A service agreement is a written agreement between IRS and an employee under which the employee agrees to a specified period of employment with IRS at the new duty station to which the employee relocated in return for payment of a relocation incentive. Before the IRS may pay a relocation incentive, an employee must sign a written service agreement to complete a specified period of employment at the new duty station to which relocated. The minimum service agreement may not be for less than six months and the maximum service agreement may not be more than four years at the new duty station to which relocated. The service agreement must: Meet the requirements of, and contain the information specified in 5 CFR 575.210; Include the commencement and termination dates of the required service period; Specify the total amount of the incentive, the method of paying the incentive, and the timing and amount of each incentive payment, as established under 5 CFR 575.209; Include the conditions under which IRS must terminate the service agreement (i.e., if an employee is demoted or separated for cause, receives a rating of record of less than ‘‘Fully Successful’’ or equivalent, fails to maintain residency in the new geographic area for the duration of the service agreement, or otherwise fails to fulfill the terms of the service agreement) and the conditions under which the employee must repay a relocation incentive under 5 CFR 575.211; and Begin upon the commencement of service at the new duty station and end on the last day of a pay period. If service at the new duty station does not begin on the first day of a pay period, the approving official must delay the service period commencement date so that the required service period begins on the first day of the first pay period beginning on or after the commencement of service at the new duty station. The approving official may delay a service agreement commencement date until after the employee completes an initial period of formal training when continued employment in the position is contingent on successful completion of the formal training. The approving official must make the determination to pay a relocation incentive before the employee enters on duty in the position. The approving official must make the determination to pay a relocation incentive before the employee enters on duty in the position. However, the service agreement must specify that if an employee does not successfully complete the training before the service period commences, the agency is not obligated to pay any portion of the relocation incentive to the employee. The requesting office must define the limits of the new geographic area in the service agreement for the purpose of determining whether an employee maintains residency in that geographic area for the duration of the service agreement. A service agreement form (Form 14065-B for non-SES or Service Agreement Template for SES) is required. 6.575.1.3.11 (09-24-2013) Termination of a Service Agreement The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to establish criteria for terminating a service agreement. The officials authorized to approve the payment of a relocation incentive are also authorized to terminate the relocation incentive service agreement. IRS may unilaterally terminate a relocation incentive service agreement based solely on management needs (5 CFR 575.211(a)). If the decision is made to unilaterally terminate the relocation incentive service agreement, the employee is entitled to all the relocation incentive payments for completed service and to retain any portion of the relocation incentive payment he or she received that is attributable to uncompleted service. IRS must terminate a relocation incentive service agreement as prescribed under 5 CFR 575.211(b) if the employee: Is demoted or separated for cause (i.e., for unacceptable performance or conduct); Receives a rating of record of less than “Fully Successful” or equivalent; Fails to maintain residency in the new geographic area for the duration of the service agreement; or Otherwise fails to fulfill the terms of the service agreement. If IRS terminates a relocation incentive service agreement based on the reasons in IRM 6.575.1.3.11(4), the following rules apply: The employee is entitled to retain the relocation incentive payments previously paid that are attributable to the completed portion of the service period. If the payments received are less than the amount that would be attributable to the completed portion of the service period, or the payments are more than the amount that would be attributable to the completed portion of the service period, IRS must follow the requirements in 5 CFR 575.211(f) to determine IRS's obligations for payment or the employee’s obligations for repayment. IRS must notify an employee in writing when it terminates a relocation incentive agreement and provide the reason(s) for the termination. The relevant business unit must initiate a timely PAR to terminate a relocation incentive. The termination of a service agreement and payment of the incentive is not grievable or appealable as prescribed under 5 CFR 575.211(c). 6.575.1.3.12 (09-24-2013) Collection of Excess Payments If an employee fails to fulfill his or her obligations for repayment, IRS must recover any outstanding incentive repayment amount from the employee consistent with IRS’s policies and procedures for collection by offset from an indebted Government employee under 5 USC 5514 and 5 CFR Part 550, subpart K, or the appropriate provisions governing Federal debt collection if the individual is no longer a Federal employee (5 CFR 575.211(g)). Authorized officials may waive the requirement to repay the excess amount when, in the judgment of the official, collection of the excess amount would be against equity and good conscience and not in the best interest of the United States (5 CFR 575.211(h)). Any waivers must be consistent and in accordance with the provisions of Treasury Directive 34-01, Waiving Claims Against Treasury Employees for Erroneous Payments, and IRM 1.2.40.14, Delegation Order 1-15, Waiving Claims Against Current or Former Employees for Erroneous Payments. 6.575.1.3.13 (03-03-2020) Relation to Other Incentives The IRS may not begin paying a relocation incentive to an eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of a recruitment incentive under 5 CFR 575.106, or for the payment of a relocation incentive previously authorized under 5 CFR 575.206 (5 CFR 575.205(d)). A relocation incentive service agreement may commence during a period of employment established under a service agreement for a previously authorized retention incentive or for which an employee is receiving previously authorized retention incentive payments without a service agreement under 5 CFR 575, subpart C. The service periods for the relocation and retention incentive service agreements must be fulfilled concurrently (5 CFR 575.205(e)). IRS may not begin paying a relocation incentive to an eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of an extended assignment incentive under 5 CFR 575, subpart E. 6.575.1.3.14 (03-03-2020) Records, Review, Reports HCO, WBP, ACLP will: Maintain a record of each determination to pay a relocation incentive; and Complete and submit a written report to Treasury on relocation incentive use during the previous calendar year. This report must include: A description of how the authority to pay relocation incentives was used; The number and dollar amount of the relocation incentives paid for each employee including the title of their position, pay plan, occupational series, grade/step rate (or equivalent), and commencement date of the incentive; and Other information, records, reports, metrics, and data OPM and/or DASHR/CHCO may prescribe. 6.575.1.3.15 (03-03-2020) Miscellaneous Provisions Aggregate Limitation: Payment of a relocation incentive is subject to the aggregate limitation on pay under 5 USC 5307, 5 CFR Part 530, subpart B, and IRM 6.530.1.2, Aggregate Limitation on Pay, as follows: SES: Total annual compensation (including a recruitment, relocation, or retention incentive payment) cannot exceed the rate payable to the Vice President under 3 USC 104 during periods when OPM and OMB certification of Treasury’s SES performance appraisal system is in effect and cannot exceed the rate of pay for level I of the Executive Schedule during periods when OPM and OMB certification of Treasury’s SES performance appraisal system has lapsed. During periods when certification is in effect: If an incentive payment would cause an employee’s total annual compensation to exceed the Vice President’s rate of pay, IRS must defer the excess amount for payment as a lump-sum payment to the beginning of the following calendar year. During periods when certification has lapsed: If an incentive payment would cause an employee’s total annual compensation to exceed the rate of pay for level I of the Executive Schedule, IRS must: (1) defer the excess amount until OPM and OMB certify Treasury’s SES performance appraisal system, at which time IRS may pay the excess amount up to the Vice President’s rate of pay and defer any remaining amount for payment as a lump-sum payment at the beginning of the following calendar year; or (2) defer the entire excess amount for payment as a lump-sum payment at the beginning of the following calendar year, if OPM and OMB do not certify Treasury’s SES performance appraisal system before the end of the current calendar year. The limitations described above also apply to employees in SL positions and ST positions who are paid under 5 USC 5376 Other Employees: Total annual compensation (including a recruitment, relocation, or retention incentive payment) cannot exceed the rate of pay for level I of the Executive Schedule in any calendar year. Excess incentive payments that would cause the employee’s total annual compensation to exceed the aggregate limitation must be deferred and paid in a lump-sum payment at the beginning of the following calendar year as provided under 5 CFR 530.203(d) and 530.204. Before receiving a relocation incentive, employees will be subject to misconduct and Federal tax compliance screening in accordance with the Appropriations Act and IRS procedures, which prohibit using appropriated funds to pay employee incentives without considering the employee’s conduct and Federal tax compliance. Details can be found in IRM 6.451.1.23, Employee Performance and Utilization, Misconduct Screening and Tax Compliance at http://irm.web.irs.gov/Part6/Chapter451/Section1/IRM6.451.1.aspx#6.451.1.23. 6.575.1.4 (09-24-2013) Retention Incentives This section establishes the IRS policy and procedures for administering the retention incentive authority. The provisions of this policy apply to employees as defined under 5 USC 5754 and 5 CFR 575.302 within IRS, plus the following positions approved by OPM at the request of Treasury: The position of National Taxpayer Advocate, IRS, appointed and compensated under Section 7803(c)(I)(B) of the Internal Revenue Code of 1986, as amended by Section 1301(c) of the Taxpayer First Act of 2019. OPM approved coverage on August 8, 1998. A position appointed and compensated under IRS broadbanding system as established by the IRS Restructuring and Reform Act (IRSRRA) of 1998, and 5 USC 9509 as provided under OPM’s Criteria for IRS Broadbanding System, effective December 19, 2000. 6.575.1.4.1 (03-03-2020) Retention Incentive Definitions The definitions used in this subsection are in addition to those listed in IRM 6.575.1.1.6 and are consistent with those contained in 5 CFR 575.302 and Treasury Human Capital Issuance, HCIS Chapter 575.3 TN-15-003. Annual Review refers to the review conducted at the end of each calendar year in which the retention incentive payment began to determine whether the original determination still applies or whether payment is still warranted as provided in 5 CFR 575.311 (a)(1). Likely to leave Federal service means IRS has determined that, in the absence of a retention incentive, an employee or group of employees is likely to leave the Federal Service or an employee has notified the IRS that he or she will leave the Federal service. Position Changes refers to when IRS assigns an employee to a different position, either a permanent change or a temporary change of more than 120 days. When this occurs, IRS must terminate the retention incentive, unless the different position is within the terms of the service agreement. 6.575.1.4.2 (03-03-2020) IRS Retention Incentive Policy An employee may be considered for a retention incentive if: The unusually high or unique qualifications (i.e., competencies) of the employee or a special need for the employee’s services makes it essential to retain the employee; and The employee would be likely to leave the Federal service in the absence of a retention incentive. The statute and regulations provide for approval of retention incentives for a group or category of employees if the agency determines that: The unusually high or unique qualifications (i.e., competencies) of the group or category of employees or a special need of IRS for the employees’ services makes it essential to retain the employees in that group or category; and There is a high risk that a significant number of the employees in the group would be likely to leave the Federal service in the absence of a retention incentive. IRS may not offer or authorize a retention incentive prior to an employee’s employment with IRS. 6.575.1.4.3 (03-03-2020) Criteria for Consideration of a Retention Incentive The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to: Determine when the unusually high or unique qualifications (i.e., competencies) of an employee or a special need of IRS for the employee’s services makes it essential to retain the employee, and when the employee would be likely to leave the Federal service in the absence of a retention incentive; Determine when a group or category of employees has unusually high or unique qualifications (i.e., competencies) or when an agency has a special need for the employees’ services that makes it essential to retain the employees in that group or category, and when there is a high risk that a significant number of employees in the group would be likely to leave the Federal service in the absence of a retention incentive; Approve a retention incentive for an employee (or group or category of employees, except as prohibited by 5 CFR 575.305(c)) in a position (or positions) listed in 5 CFR 575.303; Establish the criteria for determining the amount of a retention incentive and the length of a service period under 5 CFR 575.309 and 5 CFR 575.310, respectively; Request a waiver from OPM of the limitation on the maximum amount of a retention incentive for an employee (or group or category of employees) under 5 CFR 575.309(e); and Establish the criteria for terminating a service agreement or retention incentive payments under 5 CFR 575.311. The following factors must be considered, as applicable to the case in hand, before authorizing a retention incentive for an individual employee in determining whether the unusually high or unique qualifications of an employee or a special need of IRS for an employee’s services makes it essential to retain the employee, and that the employee would be likely to leave the Federal service in the absence of a retention incentive: Employment trends and labor market factors, such as the availability and quality of candidates in the labor market possessing the competencies required for the position, and who, with minimal training, cost, or disruption of service to the public, could perform the full range of duties and responsibilities of the employee’s position at the level performed by the employee; The success of recent efforts to recruit candidates and retain employees with competencies similar to those possessed by the employee for positions similar to the position held by the employee; Special or unique competencies required for the position; IRS efforts to use non-pay authorities to help retain the employee instead of, or in addition to, a retention incentive, such as special training and work scheduling flexibilities or improving working conditions; The desirability of the duties, work or organizational environment, or geographic location of the position; The extent to which the employee’s departure would affect IRS’s ability to carry out an activity, perform a function, or complete a project that IRS deems essential to its mission; The salaries typically paid outside the Federal Government; The quality and availability of the potential sources of employees that are identified in the organization's succession plan and knowledge transfer strategy, who possess the competencies required for the position, and who, with minimal training, cost, and disruption of service to the public, could perform the full range of duties and responsibilities of the employee’s position at the level performed by the employee; and, Other supporting factors. The regulations provide for approval of group retention incentives. The BBHR POC must initiate contact with HCO, WBP, ACLP for technical advice prior to finalizing a formal request for a group incentive. Before a group incentive may be approved, the requesting organization must determine, based upon the factors outlined above, whether a group or category of employees: Has unusually high or unique qualifications (i.e., competencies) or that IRS’s special need for the employees’ services makes it essential to retain the employees in that group or category; and That it is reasonable to presume that there is a high risk that a significant number of employees in the targeted group or category would be likely to leave the Federal service in the absence of a retention incentive. A group incentive authorization may not include any employee covered by 5 CFR 575.303(a)(2), (a)(3), or (a)(5), or those in similar categories of positions approved by OPM to receive retention incentives under 5 CFR 575.303(a)(7). The business unit must narrowly define a category or group of positions to include: occupational series, grade level, distinctive job duties, unique competencies required for the position, special project, function or activity, minimum service requirements, organization or team, geographic location, and required rating of record. HCO, WBP, ACLP will notify the DASHR/CHCO of approved group retention incentives. The notification must include information on the positions covered, service period, amount of payment, and effective date of the incentive. 6.575.1.4.4 (09-24-2013) Approval of Retention Incentives The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to approve a retention incentive for an employee. The Treasury Assistant Secretary for Management is the approving official for payment of a retention incentive to: A member of the SES, other than one for whom appointing authority is reserved to the Treasury Deputy Secretary; and An individual appointed to a position under the streamlined critical pay authority at 5 USC 9503. The Commissioner, the Deputy Commissioner for Services and Enforcement, and the Deputy Commissioner for Operations Support are the approving officials for the payment of a retention incentive for employees within his or her respective organization. This authority may not be redelegated. (See Delegation Order 6-23, Delegation of Authority to Accomplish Pay Administration, at IRM 1.2.45.13(70)). The recommending official must be at least one level higher than the employee's supervisor, unless there is no higher official within the IRS. The approving official must review and approve the retention incentive request in writing before it can be made effective and paid to the employee. 6.575.1.4.5 (09-24-2013) Eligibility To be eligible to receive a retention incentive, an employee must: Have a “Fully Successful” or equivalent or higher rating of record on the most recent annual performance appraisal; Not be fulfilling a service agreement for receipt of a previously approved recruitment or relocation incentive; and Sign a Certification of Awareness concerning buyout ineligibility (if an employee or manager). Employees in positions listed in 5 CFR 575.304, which include Presidential appointees, non-career SES appointees, and employees in positions excepted from the competitive service by reason of their confidential, policy-determining, policy-making, and policy-advocating character (Schedule C), are not eligible for a retention incentive. 6.575.1.4.6 (09-24-2013) Responsibilities The requesting manager recommends payment of a retention incentive through the second-level manager. The requesting office completes and signs the Retention Incentive Request Form 14063-B for non-SES employees or the Retention Incentive Template for SES employees. Requests for non-SES employees are routed to the BBHR POC and requests for SES employees are routed to the functional POC. The BBHR POC or functional POC: Reviews the request; Obtains clearance through their business unit finance office that funds are available; Forwards for signature by the business unit head of office, deputy head of office, or the equivalent official; and Forwards the request to HCO, WBP, ACLP for non-SES employees and HCO, OES for SES employees. HCO, WBP, ACLP will conduct a technical review on non-SES requests and the OES will conduct a technical review on SES requests. The IRS Human Capital Officer will certify that all statutory and regulatory requirements have been met. The requests for non-SES will be forwarded to the Commissioner or appropriate Deputy Commissioner for approval, and the requests for SES will be forwarded to the Treasury Assistant Secretary for Management. HCO, P&PS creates and processes the PAR and sends a copy of the documentation to the OPF Consolidated Site to be filed in the employee’s OPF. HCO, P&PS will generate periodic reports on retention incentives at the request of HCO, WBP, ACLP. HCO, WBP, ACLP is responsible for overall program administration, policy guidance, and reporting requirements. 6.575.1.4.7 (09-24-2013) Documentation For each determination to pay a retention incentive, the following must be documented in writing on the Retention Incentive Request Form 14063-B for non-SES employees or the Retention Incentive Template for SES: The basis for determining that the unusually high or unique qualifications of the employee (or group of employees), or a special need of IRS for the employee’s (or group of employees’) services, make it essential to retain the employee(s); The basis for determining that the employee (or a significant number of employees in a group) would be likely to leave the Federal service in the absence of a retention incentive; The basis for authorizing a retention incentive; The factors listed in IRM 6.575.1.4.3(2) must also be considered and addressed in writing as part of the retention incentive request; and The basis for establishing the amount and timing of the approved retention incentive payment and the length of the required service period. 6.575.1.4.8 (09-24-2013) Determining the Amount of the Retention Incentive The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to establish criteria for determining the amount of a retention incentive. For SES, the maximum amount authorized for a retention incentive is 25 percent of an employee’s annual rate of basic pay at the beginning of the service period. An incentive authorized for a group or category of employees may not exceed ten percent of each employee’s rate of basic pay. For non-SES, the parameters established in the IRS Non-SES Corporate Incentives Strategy at http://hco.web.irs.gov/compbenefits/pdf/IRSNon-SESCorporateIncentivesStrategy.ppt must be referenced and utilized. IRS may, through the DASHR/CHCO office, request OPM approval to waive the 25 percent retention incentive rate limitation for non-SES and SES employees based on the Service’s critical need for a higher incentive payment amount consistent with the requirements in 5 CFR 575.309(e). The total amount of the higher payment may not exceed 50 percent of the employee’s annual rate of basic pay. The written waiver request must include all of the information required in 5 CFR 575.309(e)(2). A written service agreement is required for any employee who may receive a higher retention incentive due to a waiver of the limitation, regardless of whether biweekly payments are authorized. 6.575.1.4.9 (03-03-2020) Payment of a Retention Incentive A retention incentive may be paid: In installments throughout the period covered by the retention incentive service agreement; or As a final lump-sum payment upon completion of the full service period required by the service agreement. An eligible employee who is receiving a retained rate of pay may also receive a retention incentive. However, the incentive payment must be based on the maximum rate for the employee’s position of record/grade and not on the retained rate of pay (5 CFR 536.307(b)). Payment of a retention incentive cannot exceed 12 months unless the retention incentive is extended through the annual recertification process. A retention incentive will not be considered part of the individual’s rate of basic pay for any purpose. Payment of a retention incentive is subject to the aggregate limitation on pay under 5 USC 5307 and 5 CFR 530, subpart B. A retention incentive will not be included in the calculation of a lump-sum payment for annual leave. 6.575.1.4.10 (03-03-2020) Service Agreement The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to establish criteria for determining the length of a service period. A service agreement is a written agreement between IRS and an employee in which the employee agrees to a specified period of employment in return for payment of a retention incentive. A service agreement is not required when payments are made: In biweekly installments at the full incentive percentage rate established for the employee; and The incentive percentage amount established for the employee is set at or below the 25 percent cap for individual authorizations or the ten percent cap for a group of employees. Before the IRS may pay a retention incentive as a final lump-sum payment or for an amount above the 25 percent cap, an employee must sign a written service agreement to complete a specified period of employment. The minimum service agreement may not be for less than six months and the maximum service agreement may not be more than four years. The service agreement must meet: The requirements of, and contain the information specified in 5 CFR 575.310; Include the commencement and termination dates of the service period; Begin on the first day of a pay period and end on the last day of a pay period; Specify the total amount of the incentive, the method of paying the incentive, and the timing and amount of each incentive payment, as established under 5 CFR 575.309; and Include the conditions under which the IRS must terminate the service agreement (i.e., if an employee is demoted or separated for cause, receives a rating of record of less than “Fully Successful” or equivalent, when IRS assigns the employee to a different position that is not within the terms of the service agreement or otherwise fails to fulfill the terms of the service agreement) as established under 5 CFR 575.311. 6.575.1.4.11 (03-03-2020) Termination of a Service Agreement The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to establish criteria for terminating a service agreement. The officials authorized to approve the payment of a retention incentive are also authorized to terminate the retention incentive service agreement. IRS may unilaterally terminate a retention incentive service agreement based solely on management needs (5 CFR 575.311(a)(3)). If the decision is made to unilaterally terminate the retention incentive service agreement, the employee is entitled to any retention incentive payments for completed service and to receive any portion of the retention incentive payment owed for completed service. IRS must terminate a retention incentive service agreement as prescribed under 5 CFR 575.311(a) and (b) for an employee if: The employee is demoted or separated for cause (i.e., for unacceptable performance or conduct); Receives a rating of less than “Fully Successful” or equivalent; The conditions change such that the original determination to pay the retention incentive no longer applies (e.g., if an employee is assigned to a different position that is not within the terms of the service agreement); or Otherwise fails to fulfill the terms of the service agreement. If IRS terminates a retention incentive service agreement based on the reasons outlined in IRM 6.575.1.4.11 (4), the following rules apply: The employee is entitled to retain the retention incentive payments previously paid that are attributable to the completed portion of the service period. If the payments received are less than the amount that would be attributable to the completed portion of the service period, or the payments are more than the amount that would be attributable to the completed portion of the service period, IRS must follow the requirements in 5 CFR 575.311(e) to determine IRS's obligations for payment or the employee’s obligations for repayment. IRS must notify an employee in writing when it terminates a retention incentive service agreement and provide the reason(s) for the termination. The relevant business unit must initiate a timely PAR to terminate the amount of a retention incentive. The termination of a service agreement and payment of the incentive is not grievable or appealable as prescribed under 5 CFR 575.311(g). 6.575.1.4.12 (03-03-2020) Continuation, Reduction, or Termination of a Retention Incentive with No Service Agreement IRS must review each determination to pay a retention incentive annually to determine whether payment is still warranted. The determination must be certified in writing. IRS may continue paying a retention incentive to an employee (when no service agreement is required) as long as the conditions giving rise to the original determination to pay the incentive still exist. IRS must reduce or terminate a retention incentive authorization (when no service agreement is required) whenever conditions change such that the original determination to pay the retention incentive no longer applies (e.g., the business unit assigns the employee to a different position that is not within the terms of the original determination) or when payment is no longer warranted at the level originally approved or at all after considering factors, such as: Whether a lesser amount (or none at all) would be sufficient to retain the employee (or group or category of employees); Whether labor-market factors make it more likely (or reasonably likely) to recruit a candidate with competencies similar to those possessed by the employee (or group or category of employees); or Whether IRS’s need for the services of the employee (or group or category of employees) has been reduced to a level that makes it unnecessary to continue payment at the level originally approved (or at all). IRS may unilaterally terminate a retention incentive (when no service agreement is required) based solely on the management needs of the agency, even if the conditions giving rise to the original determination to pay the incentive still exist (e.g., IRS may terminate a retention incentive when there are insufficient funds to continue the planned retention incentive payments). IRS must terminate a retention incentive (when no service agreement is required) when: The employee is demoted or separated for cause (i.e., for unacceptable performance or conduct); or The employee receives a rating of less than “Fully Successful” or equivalent. IRS must notify an employee in writing if a retention incentive is reduced or terminated and provide the reason(s) for the reduction or termination. An employee is entitled to receive any scheduled incentive payments through the end of the pay period in which written notification of termination was given or until the date of separation (if sooner). The relevant business unit must initiate a timely PAR to terminate the amount of a retention incentive. The termination or reduction of a retention incentive is not grievable or appealable as prescribed under 5 CFR 575.311(g). 6.575.1.4.13 (09-24-2013) Relation to Other Incentives IRS may not begin payment of a retention incentive to an eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of a recruitment or relocation incentive (5 CFR 575.309(g)(1)). IRS may not begin paying a retention incentive to an eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of an extended assignment incentive under 5 CFR 575, subpart E. 6.575.1.4.14 (03-03-2020) Annual Recertification IRS must annually review all determinations to pay a retention incentive to ascertain whether the original determination, the circumstances that supported the initial request and approval, still applies or whether payment is still warranted. During the annual recertification process, the Division Commissioner or equivalent must request and receive approval from the authority who approved the original request, if the retention incentive is to continue. Instructions for the annual recertification process will be issued by the HCO, WBP, ACLP Branch in December of each year. Failure to respond to HCO, WBP, ACLP by January 15 of the following year with the recertification form from the BBHR POC will result in a termination of the retention incentive by HCO, WBP. All recertifications must be finalized by February 15 to ensure IRS compliance with Treasury’s deadline for receipt of a completed annual report to the DASHR/CHCO no later than February 28 of every year. 6.575.1.4.15 (03-03-2020) Records, Review, Reports HCO, WBP, ACLP will: Maintain a record of each determination to pay a retention incentive; and By February 28 of every year, complete and submit a written report to Treasury on the use of retention incentives during the previous calendar year. This report must include: A description of how the authority to pay retention incentives was used; The number and dollar amount of the retention incentives paid for each employee including the employee’s name, the title of their position, pay plan, occupational series, grade/step rate (or equivalent), and commencement date of the incentive; and Other information, records, reports, metrics, and data OPM and/or DASHR/CHCO may prescribe. 6.575.1.4.16 (09-24-2013) Likely to Leave for a Different Position in the Federal Service Except as provided in this section, all other requirements in this IRM apply to the approval of a retention incentive for an employee or group or category of employees who would be likely to leave for a different position in theFederalservice. (5 CFR 575.314) An authorized official, as defined above in IRM 6.575.1.4.4, may approve a retention incentive as follows: For an individual employee when it is determined that given the Service’s mission requirements and the employee’s competencies, the IRS has a special need for the employee’s services that makes it essential to retain the employee in his or her current position during a period of time before the closure or relocation of the employee’s office, facility, activity, or organization, and the employee would be likely to leave for a different position in the Federal service in the absence of a retention incentive. For a group or category of employees when the authorized official determines that given the Service’s mission requirements and the employees’ competencies, the IRS has a special need for the employees’ services that makes it essential to retain the employees in their current positions during a period of time before the closure or relocation of the employees’ office, facility, or organization and there is a high risk that a significant number of the employees in the group would be likely to leave for different positions in the Federal service in the absence of a retention incentive. Each group retention incentive authorized under this section may cover no more than one occupational series. Note: IRS must have provided a general or specific notice to the employee that his or her position may or would be affected by the closure or relocation of the employee’s office, facility, activity, or organization. For each determination to pay a retention incentive under this section, the requesting office must document in writing: The basis for determining that IRS has a special need for the employee’s (or group of employees) services that makes it essential to retain the employee(s), based on the business needs and the employee(s) competencies during a period of time before the closure or relocation of the employee’s (or group of employees’) office, facility, activity, or organization; The basis for determining, in the absence of a retention incentive, the employee(s) would be likely to leave for a different position in the Federal service; and The basis for establishing the amount and timing of the approved retention incentive payment and the length of the required service period. For an individual employee, the requesting office must address each of the factors listed in 5 CFR 575.314(d)(2) when documenting the determinations. For a group or category of employees, the requesting office must address each of the factors listed in 5 CFR 575.314(d)(3) when documenting the determinations. Unless the retention incentive is paid in biweekly payments, the authorized IRS official must require an employee who would be likely to leave for a different position in the Federal service to sign a service agreement: The service agreement may not extend beyond the date on which the employee’s position is actually affected by a relocation or closure; and The service agreement must include the conditions under which IRS must terminate the service agreement, included those listed in 5 CFR 575.311 and 5 CFR 575.314(g), and the conditions under which the IRS will pay an additional payment for partially completed service under 5 CFR 575.311. An authorized IRS official may not pay retention incentive payments in biweekly installments at the full retention incentive percentage rate. The impacted office will need to consider options to pay all or a significant portion of the retention incentive at the end of the full period of service required by the service agreement to maximize the effectiveness of the retention incentive to retain the employee (5 CFR 575.314(e)). Each determination to pay a retention incentive under this section must be reviewed at least annually to determine whether payment is still warranted. The authorized approving official must certify this determination in writing (see IRM 6.575.1.4.14, Annual Recertification). In addition to the conditions for terminating a service agreement, an authorized IRS official must terminate a retention incentive service agreement if: The closure or relocation is cancelled or no longer affects the employee’s position; The employee moves to another position not affected by the closure or relocation (including another position within the same agency); The employee accepts an IRS or Treasury offer to relocate with his or her office, facility, activity, or organization, and the employee is no longer likely to leave for a different position in the Federal service; and The employee moves to a different position in the same office, facility, activity, or organization subject to closure or relocation that is not covered by the employee’s service agreement. In this case, the business unit, or functional office, may authorize a new retention incentive for the employee. If an authorized IRS official terminates a service agreement, the employee is entitled to retain retention incentive payments previously paid that are attributable to the completed portion of the service. If the retention incentive payments received are less than the amount that would be attributable to the completed portion of the service period, the business unit must follow the requirements in 5 CFR 575.314(g)(4) to determine the Service’s obligations for additional payment. In addition to the records and reports required in 5 CFR 575.313, IRS must submit a written report to OPM by March 31 of each year on the use of retention incentives under this section. Each report must include: The description of how IRS used the authority to pay retention incentives during the previous calendar year to employees who would be likely to leave for a different position in the Federal service before the closure or relocation of the employee's office, facility, activity, or organization; The number and dollar amount of retention incentives paid during the previous calendar year under this section by occupational series and grade, pay level, or other pay classification; The agency to which each employee would be likely to leave in the absence of a retention incentive; Each employee’s official worksite and the geographic location of the agency to which each employee would be likely to leave in the absence of a retention incentive; and Other information, records, reports, and data that Treasury and/or OPM may require. 6.575.1.4.17 (09-24-2013) Miscellaneous Provisions Aggregate Limitation: Payment of a retention incentive is subject to the aggregate limitation on pay under 5 USC 5307, 5 CFR Part 530, subpart B, and IRM 6.530.1.2, Aggregate Limitation on Pay, as follows: SES: Total annual compensation (including a recruitment, relocation, or retention incentive payment) cannot exceed the rate payable to the Vice President under 3 USC 104 during periods when OPM and OMB certification of Treasury’s SES performance appraisal system is in effect and cannot exceed the rate of pay for level I of the Executive Schedule during periods when OPM and OMB certification of Treasury’s SES performance appraisal system has lapsed. During periods when certification is in effect: If an incentive payment would cause an employee’s total annual compensation to exceed the Vice President’s rate of pay, IRS must defer the excess amount for payment as a lump-sum payment to the beginning of the following calendar year. During periods when certification has lapsed: If an incentive payment would cause an employee’s total annual compensation to exceed the rate of pay for level I of the Executive Schedule, IRS must: (1) Defer the excess amount until OPM and OMB certify Treasury’s SES performance appraisal system, at which time IRS may pay the excess amount up to the rate payable to the Vice President and defer any remaining amount for payment as a lump-sum payment at the beginning of the following calendar year; or (2) Defer the entire excess amount for payment as a lump-sum payment at the beginning of the following calendar year, if OPM and OMB do not certify Treasury’s SES performance appraisal system before the end of the current calendar year. The limitations above also apply to employees in SL positions and ST positions who are paid under 5 USC 5376. Other Employees: Total annual compensation (including a recruitment, relocation, or retention incentive payment) cannot exceed the rate of pay for level I of the Executive Schedule in any calendar year. Excess incentive payments that would cause the employee’s total annual compensation to exceed the aggregate limitation must be deferred and paid in a lump-sum payment at the beginning of the following calendar year as provided under 5 CFR 530.203(d) and 530.204. Before receiving a retention incentive, employees will be subject to misconduct and Federal tax compliance screening in accordance with the Appropriations Act and IRS procedures, which prohibit using appropriated funds to pay employee incentives without considering the employee’s conduct and Federal tax compliance. Details can be found in IRM 6.451.1.23, Employee Performance and Utilization, Misconduct Screening and Tax Compliance at http://irm.web.irs.gov/Part6/Chapter451/Section1/IRM6.451.1.aspx#6.451.1.23. 6.575.1.5 (03-03-2020) Extended Assignment Incentives This section establishes the IRS policy and procedures for administering the provisions of EAI authority (5 USC 5757 and Section 207 of the 21st Century Department of Justice Appropriations Authorization Act (Pub. L. 107–273, November 2, 2002), and 5 CFR 575, subpart E). The provisions of this policy apply to employees as defined under 5 USC 5757 and 5 CFR 575.502 within IRS, plus the following positions approved by OPM at the request of Treasury: The position of National Taxpayer Advocate, IRS, appointed and compensated under Section 7803(c)(I)(B) of the Internal Revenue Code of 1986, as amended by Section 1301(c) of the Taxpayer First Act of 2019. OPM approved coverage on August 8, 1998. A position appointed and compensated under IRS broadbanding system as established by the IRS Restructuring and Reform Act (IRSRRA) of 1998, and 5 USC 9509 as provided under OPM’s Criteria for IRS Broadbanding System, effective December 19, 2000. 6.575.1.5.1 (03-03-2020) Extended Assignment Incentive Definitions The definitions used in this subchapter are in addition to those listed above and are consistent with those contained in 5 CFR 575.502 and Treasury Human Capital Issuance, HCIS Chapter 575.5 TN-05-002. Service Agreement means a written agreement between the IRS and an employee under which the employee agrees to a specified period of employment with IRS in a particular territory, possession, or commonwealth in return for payment of an extended assignment incentive. Territory, Possession, or Commonwealth means a territory or a possession of the United States, the Commonwealth of Puerto Rico, or the Commonwealth of the Northern Mariana Islands. 6.575.1.5.2 (03-03-2020) IRS Extended Assignment Incentive (EAI) Policy This incentive may be authorized on a case-by-case basis to eligible Federal employees assigned to positions located in a territory or possession of the United States, the Commonwealth of Puerto Rico, or the Commonwealth of the Northern Mariana Islands who agree to a specified additional period of employment with IRS in that location. This policy applies to all employees of IRS except for those who are fulfilling the requirements of a service agreement for a recruitment, relocation, or retention incentive. 6.575.1.5.3 (09-24-2013) Criteria for Consideration of Extended Assignment Incentive (EAI) This incentive is similar to retention and relocation incentives, however, there are significant differences. The recipient of an EAI is not required to meet the standard of possessing unusually high, unique, or one-of-a-kind qualifications. The EAI provides management with a financial tool to retain experienced, well-trained employees (assigned to positions located in a territory or possession of the United States, the Commonwealth of Puerto Rico, or the Commonwealth of the Northern Mariana Islands) for a longer period than the employee’s initial tour of duty, when replacing that employee would be difficult and payment of the EAI would be in the interest of IRS. 6.575.1.5.4 (03-03-2020) Approval of Extended Assignment Incentive (EAI) The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to approve an EAI for an employee. The Treasury Assistant Secretary for Management is the approving official for payment of an EAI to a member of the SES, or non-SES employees selected for an SES position, other than one for whom appointing authority is reserved to the Treasury Deputy Secretary. The Commissioner, the Deputy Commissioner for Services and Enforcement, and the Deputy Commissioner for Operations Support are the approving officials for the payment of an EAI for employees within his or her respective organization. This authority may not be redelegated. The recommending official must be at least one level higher than the employee’s supervisor, unless there is no higher official within the IRS. The approving official must review and approve the EAI request in writing before it can be made effective and paid to the employee. 6.575.1.5.5 (09-24-2013) Eligibility The determination to pay an EAI must be on a case-by-case basis. All requests must contain a written determination which addresses the following criteria: Verification that the employee has completed at least two years of continuous service in one or more civil service positions located in a territory or possession of the United States, the Commonwealth of Puerto Rico, or the Commonwealth of the Northern Mariana Islands immediately before commencement of the service agreement for the EAI; A determination that it would be difficult to replace the employee with someone else with the required qualifications and experience; A determination that it is in the interest of the Government to encourage the employee to complete a specified additional period of employment with IRS in that location, considering how the employee's departure would affect IRS's ability to operate efficiently or to carry out an activity or perform a function that IRS deems essential to its mission; Verification that funds are available to pay an EAI; A detailed explanation for the need to retain the employee in one of the covered locations; How the employee’s continued service at the covered location will benefit IRS; An explanation of the specific mission, task, and/or objective the employee will accomplish during the extension; The impact the employee’s departure will have on IRS’s ability to continue and/or accomplish its mission; and If the employee has received an EAI payment within the last five years while employed with Treasury; The minimum EAI amount needed to retain the employee. An EAI may not be paid to an otherwise eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of a recruitment, relocation, or retention incentive. 6.575.1.5.6 (09-24-2013) Responsibilities The employee's manager recommends payment of an EAI through the second-level manager. The requesting office initiates and completes the EAI Worksheet and Certification Form for non-SES employees. Requests for non-SES are routed to BBHR POC. The BBHR POC: Reviews the request; Obtains clearance through their business unit finance office that funds are available; Forwards for signature by the business unit head of office, deputy head of office, or the equivalent official; and Forwards the request to HCO, WBP, ACLP. HCO, WBP, ACLP will conduct a technical review on non-SES requests. The IRS Human Capital Officer will certify that all statutory and regulatory requirements have been met. The requests for non-SES will be forwarded to the Commissioner or appropriate Deputy Commissioner for approval. HCO, P&PS creates and processes the PAR and sends a copy of the documentation to the OPF Consolidated Site to be filed in the employee’s OPF. HCO, P&PS will generate periodic reports on EAI at the request of HCO, WBP, ACLP. HCO, WBP, ACLP is responsible for overall program administration, policy guidance, and reporting requirements. 6.575.1.5.7 (03-03-2020) Documentation For each determination to pay an EAI, the following must be documented in writing on the EAI Worksheet and Certification form: The basis for authorizing an EAI, including the specific mission, task, and/or objective the employee will accomplish while receiving an EAI payment, and the impact the employee’s departure would have on the organization’s ability to accomplish its mission; and The basis for establishing the amount and timing of the EAI and the length of the required service period. 6.575.1.5.8 (09-24-2013) Determining the Amount of the Extended Assignment Incentive The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to establish criteria for determining the amount of an EAI. The amount of the EAI payment will be determined on a case-by-case basis. The amount will align with IRS’s need for the employee’s qualifications and experience and the mission and objectives of the organization. The amount of the payment cannot exceed the greater of: 25 percent of the annual rate of basic pay of the employee at the beginning of the service period times the number of years (including fractions of a year) in the service period; or $15,000 per year (including fractions of a year) in the service period. 6.575.1.5.9 (09-24-2013) Payment of an Extended Assignment Incentive The incentive payment may be paid: As an initial lump-sum payment at the beginning of the service period; In installments throughout the period covered of the EAI; As a final lump-sum payment at the end of the service period; or A combination of payment methods. EAI are usually paid in a lump-sum at the beginning of the service period. The incentive payment will not be considered part of the individual’s rate of basic pay for any purpose. Payment of an EAI is subject to the aggregate limitation on pay under 5 CFR 530, subpart B. An EAI will not be included in the calculation of a lump-sum payment for annual leave. 6.575.1.5.10 (03-03-2020) Service Agreement The IRS retains the sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to establish criteria for determining the length of a service period. A service agreement is a written agreement between IRS and an employee in which the employee agrees to a specified period of employment located in a territory or possession of the United States, the Commonwealth of Puerto Rico, or the Commonwealth of the Northern Mariana Islands in return for payment of an EAI. Before the IRS may pay an EAI, an employee must sign a written service agreement to complete a specified period of employment located in a territory or possession of the United States, the Commonwealth of Puerto Rico, or the Commonwealth of the Northern Mariana Islands. The service agreement must: Meet the requirements of, and contain the information specified in, 5 CFR 575.510 and Treasury Human Capital Issuance, HCIS Chapter 575.5 TN-05-002 Provision 9(C); Include the commencement and termination dates of the required service period; Begin on the first day of a pay period and end on the last day of a pay period; Include conditions for which the IRS may terminate an EAI payment as prescribed under 5 CFR 575.512; Include conditions for which the employee is required to repay an EAI payment as prescribed under 5 CFR 575.513; Include procedures for repayment of an EAI if the employee fails to fulfill the terms of the service agreement; Include conditions for which the IRS may impose a repayment penalty under 5 CFR 513(e) for an employee who fails to fulfill the terms of a service agreement; and Specify the total amount of the incentive and the method of paying the incentive. The maximum service period under one or more EAI service agreements with Treasury in a particular authorized location may not exceed five years. 6.575.1.5.11 (03-03-2020) Termination of a Service Agreement The IRS retains sole and exclusive discretion, subject only to Treasury and OPM review and oversight, to establish criteria for terminating a service agreement. The officials authorized to approve the payment of an EAI incentive are also authorized to terminate the agreement. IRS may unilaterally terminate a service agreement based solely on the business needs of the agency. For example, an authorized agency official may terminate a service agreement when the employee’s position is affected by a reduction in force or when there are insufficient funds to continue the planned incentive payments. If IRS terminates a service agreement based on the reasons outlined in IRM 6.575.1.5.11(4), the employee is entitled to keep all incentive payments received and, if applicable, is entitled to receive any additional amount representing the difference between the amount received and the prorated share of the total incentive attributable to completed service. The employee may receive a portion or all of the incentive payment attributable to uncompleted service only to the extent provided in the service agreement. IRS must notify an employee in writing when it terminates an EAI and provide the reason(s) for the termination. 6.575.1.5.12 (03-03-2020) Relation to Other Incentives IRS may not begin paying an EAI under 5 CFR Part 575, subpart E, to an eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of a recruitment, relocation, or retention incentive (5 CFR 575.506(b)). 6.575.1.5.13 (09-24-2013) Reports HCO, WBP, ACLP will submit a written report to Treasury no later than January 9 of each calendar year, which will include: The number of EAI agreements that commenced in each fiscal year; The dollar amount expended on EAIs each fiscal year; The number of employees who declined an EAI, by series and location; The number of employees who signed an EAI service agreement, the total amount of the planned incentive, and the total number of years of agreed-upon service, by series and location; The number of employees whose service agreements were terminated before the completion of the agreed-upon service period and sub-counts showing the number covered under 5 CFR 575.511, 575.512, and 575.513; The number of employees who incurred a repayment debt under 5 CFR 575.513 and the total amount of repayment debt incurred; The portion of the repayment debt that, as of December 31, has been recovered, is subject to ongoing collection efforts and has been waived or written off; Whether the use of EAIs influenced employees to stay longer than their initial tour of duty at their current duty station; and IRS’s recommendations for changes to improve the effectiveness of EAIs. 6.575.1.5.14 (03-03-2020) Miscellaneous Provisions Aggregate Limitation: Payment of an EAI is subject to the aggregate limitation on pay under 5 USC 5307, 5 CFR Part 530, subpart B, and IRM 6.530.1.2, Aggregate Limitation on Pay, as follows: SES: Total annual compensation (including a recruitment, relocation, or retention incentive payment) cannot exceed the rate payable to the Vice President under 3 USC 104 during periods when OPM and OMB certification of Treasury’s SES performance appraisal system is in effect and cannot exceed the rate of pay for level I of the Executive Schedule during periods when OPM and OMB certification of Treasury’s SES performance appraisal system has lapsed. During periods when certification is in effect: If an incentive payment would cause an employee’s total annual compensation to exceed the Vice President’s rate of pay, IRS must defer the excess amount for payment as a lump-sum payment to the beginning of the following calendar year. During periods when certification has lapsed: If an incentive payment would cause an employee’s total annual compensation to exceed the rate of pay for level I of the Executive Schedule, IRS must: (1) Defer the excess amount until OPM and OMB certify Treasury’s SES performance appraisal system, at which time IRS may pay the excess amount up to the rate payable to the Vice President and defer any remaining amount for payment as a lump-sum payment at the beginning of the following calendar year; or (2) Defer the entire excess amount for payment as a lump-sum payment at the beginning of the following calendar year, if OPM and OMB do not certify Treasury’s SES performance appraisal system before the end of the current calendar year. The limitations above also apply to employees in SL positions and ST positions who are paid under 5 USC 5376. Other Employees: Total annual compensation (including a recruitment, relocation, or retention incentive payment) cannot exceed the rate of pay for level I of the Executive Schedule in any calendar year. Excess incentive payments that would cause the employee’s total annual compensation to exceed the aggregate limitation must be deferred and paid in a lump-sum payment at the beginning of the following calendar year as provided under 5 CFR 530.203(d) and 530.204. Before receiving an EAI, employees will be subject to misconduct and Federal tax compliance screening in accordance with the Appropriations Act and IRS procedures, which prohibits using appropriated funds to pay employee incentives without considering the employee’s conduct and Federal tax compliance. Details can be found in IRM 6.451.1.23, Employee Performance and Utilization, Misconduct Screening and Tax Compliance at http://irm.web.irs.gov/Part6/Chapter451/Section1/IRM6.451.1.aspx#6.451.1.23. More Internal Revenue Manual