Can You Work for the IRS if You Owe Taxes?

Navigating Federal Employment with Tax Debts

The Internal Revenue Service (IRS) plays a crucial role in ensuring tax compliance and collecting revenue for the United States government. As such, the IRS expects its employees to uphold the highest standards of integrity, including fulfilling their tax obligations. This raises the question: can individuals with outstanding tax debts be eligible for federal employment, particularly within the IRS?

IRS Employment Eligibility and Tax Compliance

The Federal Employee Tax Accountability Act of 2012 (H.R. 828) aimed to limit the eligibility of delinquent taxpayers for federal employment, including those with outstanding tax debts and public liens. However, this bill has not yet been enacted into law.

Currently, there is no explicit prohibition against individuals with tax debts seeking employment with the IRS. However, the IRS, like other federal agencies, conducts thorough background checks on potential employees, which may include a review of their tax history.

IRS Background Checks and Tax Debts

During the IRS background check process, any outstanding tax debts or liens may be identified. The IRS may consider the following factors when evaluating an applicant’s tax compliance:

• Nature and Severity of Tax Debt: The IRS will assess the type and amount of tax debt owed, as well as any history of non-compliance or willful neglect.
• Payment Arrangements and Resolution Efforts: Applicants who have entered into payment arrangements or are actively working to resolve their tax debts may be viewed more favorably.
• Criminal Tax Convictions: Any criminal tax convictions or pending charges can significantly impact an applicant’s eligibility for IRS employment.

Exceptions to Tax Debt Eligibility Restrictions

Even if an applicant has outstanding tax debts, they may still be eligible for IRS employment under certain exceptions:

• Payment Arrangements: Applicants who have made arrangements to pay off their tax debts may be considered eligible, provided they are adhering to the terms of the agreement.
• Offer-in-Compromise: Applicants who have submitted an offer-in-compromise to settle their tax debt may be eligible, depending on the status of their offer.
• Collection Due Process Hearing: Applicants who have requested or are pending a collection due process hearing may be eligible, as their case is still under review.
• Tax Relief: Applicants who have received tax relief, such as penalty abatement or discharge of debt, may be eligible.

While the Federal Employee Tax Accountability Act has not been enacted, the IRS considers tax compliance an important factor in its hiring decisions. Applicants with outstanding tax debts should be prepared to address their situation during the background check process. By being transparent and proactive in resolving their tax obligations, individuals can increase their chances of being considered for IRS employment.