IRS plans to bring back fired probationary employees

The IRS headquarters in Washington
The IRS headquarters in Washington.
Andrew Harrer/Bloomberg

The Internal Revenue Service reportedly intends to reinstate thousands of probationary employees who were fired after two courts ordered it to do so.

IRS acting commissioner Melanie Krause announced in a conference call Wednesday that approximately 7,000 fired employees would be able to return to work by April 14, a day before the end of tax season, according to the Federal News Network. The IRS also sent out an email to the employees whom the Trump administration began firing in February.

"You are receiving this email as one of approximately 7,000 probationary employees who were separated from service and have been reinstated in compliance with recent court orders," said the email. "At this time, while you remain on administrative leave, you will soon receive instructions for how to return on full-time duty by April 14."

The IRS confirmed to Accounting Today it sent the memo, which is entitled "Preparation for Returning to Full Duty by April 14." Employees will be able to get back their identity badges, computer equipment and workspace assignments and will be allowed to temporarily take advantage of telework if office space isn't available for them.

"You can find basic information at IRS.gov Probationary Employee Resources, including information on how benefits will be restored," said the memo. "Future communications will provide instructions on obtaining a PIV Card and IT equipment, workspace assignments and temporary telework where space is not available, in addition to updated information on reinstating benefits and outside employment."

However, employees are also being given the option to not return to work at all. "If you wish to not return and voluntarily resign from federal service, you should send an email to Separation@IRS.gov as soon as possible," said the email. "Please know that outside employment does not necessarily prevent you from returning to work. If you have secured outside employment and wish to continue with the outside employment while re-employed with the IRS, you must submit an outside employment request to your manager. They will process the request in accordance with IRM 6.735.2 (IRS Outside Employment) to determine if the outside employment is a permitted activity. We appreciate your patience and cooperation as we work through this process. If you need to update the contact information we have on file for you, contact the Employee Resource Center (ERC) by calling the Operations Support Customer Assistance Line: 866-743-5748, Option 1, and then select the appropriate menu item."

The IRS had placed many of the fired employees on paid administrative leave in order to comply with a federal judge's order in California requiring employees at the Treasury Department and five other government agencies to be reinstated. However, the judge later ruled that putting the fired employees on paid administrative leave wasn't enough to comply with his preliminary injunction. Another judge in Maryland on Tuesday ordered 18 federal agencies to reinstate workers in 19 states and the District of Columbia. The National Treasury Employees Union and other unions have filed lawsuits against the Trump administration over the firings and an executive order eliminating collective bargaining rights.

Some IRS employees have reportedly been using the time on paid administrative leave to search for other jobs, which could help fill the ranks of accounting firms and other businesses searching for talent.

Joseph Perry, national tax leader and managing director at the accounting and professional services firm CBIZ, has been seeing more resumes coming in from IRS employees. "We actually have an uptick in resumes," he recently told Accounting Today. "In fact, I was connected by a business leader to somebody that is still working for the IRS, but is not going to be there too much longer, and he's exploring other options. So there is going to be, I think, an uptick in many companies. The IRS has really good, talented people that are going to come back into industry, that are going to be very useful to firms like our firm, CBIZ, to bolster our ability to service our clients in an effective way."

Staffing companies have seen some interest, but the uncertain state of the various court cases may have been keeping employees on the sidelines.

"It's still a bit early to tell if there's been a significant increase in interest from former federal employees in the private sector accounting and tax space," said Brandi Britton, executive director of finance and accounting practice at the staffing company Robert Half. "While we do see candidates with federal experience, it's difficult to immediately distinguish between those transitioning directly from federal roles and those who have federal experience as part of their broader career background. What we do know is that finance and accounting leaders are facing ongoing skills gaps and are actively seeking candidates to fill in-demand roles. A few notable skills gaps include finance and FP&A, financial reporting and tax expertise." 

Hiring former IRS employees would make only a small dent in the shortage of accounting talent, and many firms are turning to outsourcing.

"From what I understand, there were 7,000 people of the IRS that were initially let go or fired or encouraged to [take] early retirement," said Andy Schachtel, CEO of the offshore outsourcing firm Sourcefit. "There was an injunction against that, so a large majority of that 7,000 were supposed to be reinstated already. Maybe down the line there will be those layoffs, but when you're talking about 675,000 CPAs in the United States, and about 75% of those people are at [or near] retirement, it's just a small drop in the bucket."

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