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Automatic Firing

The Internal Revenue Service does not play around with any employees who play games with their individual tax returns. The MSPB and a federal court recently upheld this theory as an IRS employee with improper deductions loses his appeals and his job.

A Tax Examining Assistant fired by the IRS for understating his tax liability won no sympathy from the Merit Systems Protection Board, and, now, the Federal Circuit. (Underwood v. Department of the Treasury, C.A.F.C. No. 2006-3261 (non precedent), 12/8/06)

Tommie Underwood ran afoul of the IRS zero tolerance for employees who play games with their individual tax returns. As related by the court decision, there was no dispute that Underwood continued to claim his stepfather as a dependent on his tax return even though the gentleman had died during the previous tax year. As a Tax Examining Assistant, Underwood fully understood tax regulations and therefore it was concluded that he had willfully understated his income by claiming this improper deduction.

Under the IRS Restructuring and Reform Act of 1998 (Pub. L. No. 105-206, title I, § 1203(c)(3)), removal is mandatory unless the Commissioner of Internal Revenue—in his sole discretion and without review—determines that removal should be mitigated. As the court stated, “Thus, neither the agency nor the board was required to consider mitigating and aggravating factors under Douglas v. Veterans Administration (5 MSPB 313, 333 (MSPB 1981)).”

In short, the court affirmed the Merit Systems Protection Board, which had in turn affirmed the IRS removal of Underwood. He stays fired.

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.