Uncle Sam Wants His Money!

Failing to report income on a tax return can get anyone in trouble. For an IRS employee, it is a firing offense and this case shows it will be upheld on appeal.

If you work for the Internal Revenue Service, it’s not a good idea to cheat on your federal income taxes.  The IRS has consistently taken a dim view of tax cheaters on its payroll for what would seem to be a pretty obvious reason.

Michael Akers now joins the ranks of fired IRS employees. (Akers v. Department of the Treasury, U.S.C.A.F.C. No. 06-3075 (non precedent), 5/3/06).

He failed in two tax years to report income earned by painting houses on the side. The IRS fired him for willfully understating his income tax liability in violation of the IRS Restructuring and Reform Act of 1998 (section 1203(d)(9) of Public Law No. 105-206, 112 Stat. 685, 720-21).

Akers appealed to the Merit Systems Protection Board, which made short work of sustaining his firing. (Akers v. Dep’t of the Treasury, 100 M.S.P.R. 270 (2005))

When he tried his hand with the federal appeals court, Mr. Akers found an equally unsympathetic audience. The court issued a two-page decision in which it affirmed the agency’s decision and the Board’s upholding of that decision to remove Mr. Akers.

The court points out that, contrary to Akers’ argument that his outside activity was a hobby, the facts that he distributed flyers and solicited customers add up to support the Board’s conclusion that this was in fact an outside business. Case closed.

About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.