Purpose: This IRM contains the Servicewide policy to address employees performing below the fully successful level (minimally successful or unacceptable). As appropriate, actions to address less than fully successful performance may be taken in compliance with 5 CFR 432, 531 or 752.

Audience: All IRS employees who are not serving a probationary/trial period or a temporary/term appointment excluding contractors and Chief Counsel.

Policy Owner: Human Capital Office (HCO), Policy Office.

Program Owner: HCO.

Primary Stakeholders: The Labor/Employee Relations and Negotiations (LERN) Division and IRS managers.

Program Goal: To correct employee performance deficiencies.

This IRM covers:

An employee in the competitive service who is not serving a probationary/trial period under an initial appointment who has completed one year of current continuous service under other than a temporary appointment limited to one year or less. An exception for Criminal Investigation (CI), the 1811 series, where the probationary period is typically three (3) years, in accordance with 5 USC 9510 (d).

A preference eligible in the excepted service who has completed one year of current continuous service in the same or similar positions in an executive agency.

An individual in the excepted service (other than a preference eligible) who is not serving a probationary or trial period under an initial appointment pending conversion to the competitive service or who has completed two years of current continuous service in the same or similar positions in an executive agency under other than a temporary appointment limited to two years or less.

Per 26 USC 7803(c)(2)(D)(i)(ii), the National Taxpayer Advocate has responsibility and authority to evaluate and take personnel actions (including removal) with respect to any employee in any local office of a taxpayer advocate.

See DO 6-29, Authority to Address Employee Performance or Conduct Issues in IRM 1.2.2, Servicewide Policies and Authorities, for the management levels authorized to issue letters (proposals, decisions, etc.).

If management determines an employee’s performance is less than fully successful and/or the employee is not meeting the retention standard, the employee’s supervisor must promptly contact a LERN specialist, for guidance.

A covered employee (see IRM 6.432.1.3, Employees Covered), may be reduced in grade/pay/payband or removed at any time during their performance appraisal cycle if his/her performance becomes unacceptable in one or more Critical Job Element (CJE) or Critical Performance Element (CPE) or he/she fail to meet the retention standard. Prior to proposing such an action in compliance with 5 CFR 432, the employee is given an opportunity to demonstrate an acceptable level of performance (at least minimally successful).

All performance actions will be fair and administered as timely as possible.

If an employee’s performance remains at the unacceptable level and/or he/she does not meet the retention standard after an opportunity to demonstrate acceptable performance, management may initiate a performance-based action under 5 CFR 432. The employee is entitled to:

Per Article 40 in the National Agreement, a BU employee may request to be accompanied by a union representative at a meeting between the employee and management if the principal topic of discussion is action or potential action based on unacceptable performance and/or failure to meet the retention standard.

Per 5 CFR 432.105, the IRS will allow the employee to be represented by an attorney, other representative, or a NTEU representative (for BU employees), unless such choice:

If management disallows the designated representative based on any of the above reasons, within 10 workdays of receiving the employee’s written designation of representative, management will provide the written disallowance to the employee and the disallowed representative. The written disallowance includes notice of the right to appeal the disallowance decision.

The employee (not the disallowed representative) may appeal the decision to disallow the representative by:

Within 15 workdays of receiving the appeal about the initial representative disallowance decision, the LERN’s DD Field Ops will make and communicate a final decision to allow or disallow the representative. The final decision may not be grieved, and the performance action will proceed.

When management determines the performance of an employee, as described in IRM 6.432.1.2, Employees Covered for Performance Based Actions, is unacceptable in one or more CJE(s) or CPE(s), and/or he/she fails to meet the retention standard, the manager will meet with the employee and advise him/her that he/she is being issued a PIP with 30 business days to demonstrate at least an acceptable level of performance (minimally successful) to prevent a performance-based action. The PIP period begins with the employee’s receipt of the written PIP letter. The PIP is drafted by management’s assigned LERN specialist. It is reviewed, approved, and issued by the manager with the delegated authority. See IRM 6.432.1.4, Delegation of Authority.

The PIP must contain the following:

A rating of record will not be assigned to the employee while he/she is on a PIP. The rating of record will be postponed until the PIP expires, and if needed, the manager will advise the employee in writing that his/her appraisal period is being extended. See IRM 6.430.2.4.2.2, Extension of the Appraisal Period, for more information.

The employee will be notified in writing of improved performance if he/she improves to minimally successful or better. The letter will also inform the employee that if his/her performance becomes unacceptable in the same CJE(s) or CPE(s), or the retention standard at any time during the year after receiving the PIP, an advance notice (proposal letter) will be issued to reduce him/her in grade/pay/payband or remove him/her without an additional PIP.

A 30-day advance notice of a performance-based action will be issued as soon as possible if the employee’s performance remains unacceptable when the PIP ends. The examples of unacceptable performance and/or failure to meet the retention standard cited in the advance notice (proposal letter) must have occurred within the one-year period prior to issuing the advance notice (proposal letter).

Advance notice of proposed action is drafted by management’s assigned LERN specialist. Then it is reviewed, discussed, approved, and issued by the manager with the delegated authority (Proposing Official). See IRM 6.432.1.4, Delegation of Authority.

An advance notice proposing a reduction in grade/pay/or removal will include, as applicable, the following information:

Management delivers the advance notice to the employee in person when possible. If personal delivery is not possible/appropriate (e.g. the manager would need to travel since the employee is not co-located with them), management delivers the advance notice by encrypted email. Management asks the employee to acknowledge receipt of the notice by signing and dating it. If the employee refuses to acknowledge receipt, the manager delivering the notice attests to delivering the notice by signing and dating it and includes the following statement: Employee refused to acknowledge receipt; hand delivered [or emailed] on (date) at (time).

When the advance notice (proposal letter) is issued to a BU employee, the NTEU chapter that represents the employee and the NTEU National Field Office simultaneously receive a redacted copy (personally identifiable information and information protected by the Internal Revenue Code is removed) of the notice, per Article 40 of the National Agreement.

Employees usually remain in a duty status during the advance notice period unless they are a seasonal employee who is placed in non-duty status due to lack of work.

Employees may request and receive approval for leave during the advance notice period per the IRM 6.630 Absence and Leave series and the National Agreement for BU employees.

Management may rescind and reissue an advance notice if, for example, new information is discovered that may result in an additional charge (reason) or specification and/or a more severe penalty, a procedural error is found, or there is a change in the nexus. If the Advance Notice is rescinded, the advance notice period restarts.

If an employee chooses to resign or submit a retirement application during the advance notice period, management must not rescind the proposal letter since a resignation or retirement can be withdrawn or cancelled any time before the effective date.

Per 5 CFR 432.105(a)(4)(i)(A), the agency shall afford the employee a 30-day advance notice of the proposed performance-based action identifying both the specific instances of unacceptable performance by the employee on which the proposed action is based and the CJE(s) or CPE(s) of the employee's position involved in each instance of unacceptable performance.

Per 5 CFR 432.105(a)(4)(i)(B), an agency may extend the advance notice period for a period not to exceed 30 days under regulations prescribed by the head of the agency. An agency may extend this notice period further without prior OPM approval for the following reasons:

If an extension of the advance notice period is necessary for another reason, prior approval must be requested. To request approval management will contact their assigned LERN specialist, to request prior approval from the Manager, Employee Accountability, Accountability and Workforce Relations, Employee Services, OPM, 1900 E Street NW, Washington, DC 20415.

The purpose of an oral and/or written reply is to give an employee and/or representative an opportunity to present information in response to the advance notice (proposal letter) before a decision is made.

The Oral Reply Officer who hears the oral reply will be different than the manager who proposed the performance-based action.

The Oral Reply Officer will conduct an oral reply, if requested, and ask questions to clarify factual matters, if needed. To prepare for the oral reply, the Oral Reply Officer will:

If management receives a request to postpone the oral reply, he/she will be promptly provided it to their assigned LERN Specialist, who will assist management with responding.

A supplemental notice is issued to an employee if the deciding official wants to consider new or material adverse information to support his/her decision, and the adverse information was not covered in the proposal letter.

If a supplemental notice is issued to the employee, he/she may:

A supplemental notice is rarely needed. In lieu of a supplemental notice, management has the option to rescind the proposal letter and reissue one containing the new or material adverse information, which restarts the advance notice period.

Per 5 USC 4303(c)(1), the decision (decision letter) on the proposed action shall be made within 30 calendar days after the advance notice period expires.

The decision regarding a proposed performance-based action for unacceptable performance and/or failure to meet the retention standard must be made by a higher management position than the proposing official. See DO 6-29, in IRM 1.2.2, Servicewide Delegations of Authority, for details.

The decision will sustain or not sustain the reason(s) and specification(s) in the advance notice (proposal letter). The decision will also address factual disputes if any were raised in the oral/written reply, and if applicable, will explain how they were resolved.

The decision will inform the employee of his/her appeal rights and/or grievance rights. An appealable action is not grievable under IRM 6.771 , Agency Grievance System.

The deciding official will consider any medical condition raised by the employee, and the decision will inform the employee that the medical condition he/she raised was considered. If the employee has the required years of CSRS or FERS service, he/she will be provided information concerning application for Disability Retirement See 5 CFR 831, Subpart L and 5 CFR 339.104, for more information.

If a removal decision is issued and the employee accepts a position with a different federal agency before the effective date, a statement about the employee’s performance (also known as a remark or agency finding) may not be placed on the SF-50.

When the decision letter is issued to a BU employee, the NTEU chapter that represents the employee and the NTEU National Field Office simultaneously receive a redacted copy of the notice (i.e., personally identifiable information and information protected by the Internal Revenue Code is removed), per Article 40 of the National Agreement.

For the definition of a tax “return,” see 26 USC Section 6103(b)(1), at https://www.govregs.com/uscode/26/6103.

For the definition of “return information,” see 26 USC Section 6103(b)(2), at https://www.govregs.com/uscode/26/6103.

Upon written request, per 26 USC 6103(I)(4)(A), tax returns, and/or return information may be disclosed for use in a personnel matter as described in (4) below. If a tax return and/or return information is cited as an example in a performance action, the confidentiality of the taxpayer’s information must be safeguarded (e.g. cited in an attachment or taxpayer key). For general guidance, see IRM 10.5.6.8.1, Privacy Act Requirements for Personnel Records, and IRM 11.3.29.8, Disclosure of Returns and Return Information for use in Personnel or Claimant Representative Matters - IRC 6103(l)(4). See Exhibit 6.432.1-1, Sample Request for Material Relied On (Evidence) and Representative’s Access to Tax Information.

Upon written request, per 26 USC 6103(I)(4), returns and/or return information may be disclosed to an employee, former employee, or an approved representative. See IRM 6.432.1.7, Right to Representation, for more information on designating a representative.

In compliance with 26 USC 6103(p)(3)(A), Form 5466-B, Multiple Records of Disclosure, is completed when disclosing tax returns or return information. See IRM 11.3.37, Disclosure of Official Information, Recordkeeping and Accounting for Disclosures, for more information.

Appeal Rights include:

A “Clean Record” or “Clean 50” settlement agreement (settlement) is not authorized after a performance-based proposal/decision letter is issued.

Mitigating a Performance Action - Management may settle a performance based action by mitigating (reducing) the original penalty if the mitigated penalty:

Third Party Settlement - Must be coordinated with a LERN specialist, and with the appropriate Area Counsel, General Legal Services. Management must contact their assigned LERN specialist if they want to settle a performance action by mitigating (reducing) the original penalty.

The performance-based action process ceases upon receipt of an employee’s proof of death, which may include an SF-50, Notification of Personnel Action.

Management has the option of offering Last Rights to employees who may be issued an advance notice/proposal letter for a removal action taken under 5 CFR 432.

When an employee faces a potential performance-based action, they may choose to resign, retire, or request a change to lower grade prior to receiving the Advanced Notice/proposal letter. An employee’s decision to resign, retire, or request a change to lower grade, is voluntary.

If management decides to offer Last Rights to a BU employee prior to issuing a proposal letter, they must read Article 5, Section 5, of the National Agreement.

Management must contact their assigned LERN specialist (or LERN manager) before holding the Last Rights meeting to ensure adherence to policy and hiring compliance (for example, see IRM 6.332.2.4, Prior Performance & Misconduct Check/Screening.

Per the OPM’s Guide to Processing Personnel Actions (GPPA), if an employee, as defined in 5 USC 7501:

As stated in IRM 10.5.1.2.3, Personally Identifiable Information (PII), PII refers to information that can be used to distinguish or trace an individual’s identity, either alone or when combined with other information that is linked or linkable to a specific individual.

PII may include, for example, social security numbers, birth dates, addresses, or telephone numbers.

See IRM 10.5.4.3.1, Timely Reporting: Immediately Upon Discovery, for actions required in response to IRS data breaches, such a PII and tax information.

See IRM 6.531.1, Pay Under the General Schedule and IRS Payband System, for more information about Within Grade Increases.

Per 5 CFR 531, Subpart D, an employee occupying a permanent position, classified and paid under the General Schedule or Law Enforcement Officers (identified by the GL pay plan), who is not an SES employee or on a payband position, must be performing at a fully successful level to receive a WGI. If he/she is performing at a minimally successful or unacceptable level, approximately 90 days before he/she completes the waiting period for the WGI, the manager must contact his/her LERN specialist for guidance and preparation of the intent to deny WGI notice to the employee.

Per 5 CFR 531.409(e) and Article 17 of the National Agreement (as a matter of policy, provision is extended to NBU employees), at least 60 days before the employee completes the required WGI waiting period, management will issue a notice of intent to deny the employee’s WGI unless his/her performance improves to at least fully successful. The letter is drafted by management’s assigned LRS. It is reviewed, approved, and issued by the manager with the delegated authority (see IRM 6.432.1.4, Delegation of Authority). The letter provides the employee an opportunity to improve and identifies which CJE(s) or CPE(s), as appropriate, and/or the retention standard the employee is failing to meet and provides examples of less than fully successful performance.

If the employee’s performance does not improve to at least fully successful, he/she is issued a notice advising him/her that the WGI is denied. The letter is drafted by management’s assigned LRS. It is reviewed, approved, and issued by the manager with the delegated authority, (see IRM 6.432.1.4, Delegation of Authority). The notice advises the employee:

If the employee’s performance improves to at least fully successful after a negative determination, management inputs the new rating in the automated performance appraisal system and issues him/her a notice with the effective date of their WGI. The effective date of the WGI is the first day of the first pay period after the acceptable level of competence (at least fully successful) determination.

Types of moratoriums and the annual holiday moratorium.

What Occurs During a Moratorium - A moratorium does not prohibit all actions. Management may proceed with certain actions if appropriate.

After consulting with their assigned LERN specialist, management may unilaterally, correct mistakes made when taking a performance-based action (e.g. modifying an employee’s personnel record to remove inaccurate information or an SF-50 for an erroneous/illegal action).

If management determines a performance-based action was taken erroneously, they may take corrective action, even if an appeal/complaint has been filed about the matter.

Management must ensure it removes only the information they determine to be inaccurate or to reflect an action taken illegally or in error.

Management may unilaterally act on a finding of discrimination or implement an EEO, MSPB, arbitrator, or other third-party order.

Management and their assigned LERN specialist, must coordinate these actions with Chief Counsel’s Labor & Personnel Law Branch and/or the Office of Civil Rights and Compliance, as appropriate.

In compliance with Document 12829, The General Records Schedules (see 2.3, Employee Relations Records), LERN retains performance case files for six years.

Per 5 CFR 432.107(b), if the employee is not reduced in grade/pay/payband or removed because of improved performance and the employee’s performance continues to be acceptable for one year from the date of the advance notice (proposal letter), any entry or other notation of the unacceptable performance for which the action was proposed shall be removed from any agency record relating to the employee.

The SF-50 for the performance-based action is a permanent record filed in the employee’s OPF.

For SES employees, see