6.735.2. IRS Outside Employment

(1) Purpose: This IRM describes the Servicewide policy on the Outside Employment (OE) program to ensure compliance with the tenth principle of ethical conduct covered in the Office of Government Ethics (OGE) Standards of Ethical Conduct, Employees shall not engage in outside employment or business activities, including seeking or negotiating for employment, that conflicts with official Government duties and responsibilities (see links in IRM 6.735.2.1.6, Related Resources). It also contains procedures to request and receive approval to perform permitted OE activities, distribute approved/denied requests, annually update OE records, and ensure compliance.

(2) Audience: The policies, authorities, procedures, and instructions contained in this IRM apply to all IRS employees excluding contractors.

(3) Program Owner: The IRS Human Capital Officer (HCO).

(4) Policy Owner: The IRS HCO Policy and Audits (P&A) division.

(5) Operations Owner: The IRS HCO Office or Human Resource (HR) Operations, Labor/Employee Relations & Negotiations (LERN) division,

(6) Primary Stakeholders: The IRS HCO P&A, LERN and Human Resources Shared Services divisions.

(7) Program Objectives: To ensure employees request approval to perform permitted OE activities, if appropriate, and managers regularly remind employees they must not perform prohibited OE activities. Managers must timely review and approve/deny requests and annually update their employees’ approved records to comply with this IRM and the tenth ethics principle covered in Document 9300 , 14 General Principles of Ethical Conduct. See links in IRM 6.735.2.1.6, Related Resources.

(1) Refer to Delegation Order 6-4, Authorization to Engage in Outside Employment, Business, and Other Activities, located in IRM 1.2.2, Servicewide Delegations of Authority.

(1) Outside employment or business activities must not conflict with the employee's IRS duties. A conflict exists if:

1. The activity is prohibited by statute, regulation, the OGE, Treasury, or IRS standards of ethical conduct; or

2. It requires the employee’s disqualification from performing their IRS duties, because the OE activity would materially impair the employee’s ability to carry out their IRS duties.

(2) Outside employment or business activities may not be performed:

1. During the employee’s IRS tour of duty;

2. At the employee’s assigned post of duty or temporary work location;

3. At the employee’s approved remote work or telework site during their IRS tour of duty;

4. On Treasury or IRS property;

5. Using government property (for example, supplies, badges, credentials, computers, email, phones, and other Information Technology devices and resources). See IRM 10.8.27, IRS Policy on Limited Personal Use of Government Information Technology Resources, for details; or,

6. If the OE or business activity impedes the IRS mission or is deemed likely to negatively affect the public’s perception of the IRS.

(1) Prohibited activities must not be performed by IRS employees and may not be performed indirectly, for example, through a business, family members, or friends. The types of outside employment or business activities that are prohibited include:

1. Performing legal services involving federal, state, or local tax matters. A tax matter is one in which the attorney is acting as a tax practitioner/advisor. For example, providing tax-related estate planning advice is prohibited; however, drafting powers of attorney and simple wills where the estate is not subject to federal, or state estate taxes is permitted;

2. Appearing on behalf of any taxpayer as a representative before any federal, state, or local governmental agency, in an action involving a tax matter, except with the written authorization of the Commissioner of Internal Revenue;

3. Engaging in accounting, or the use, analysis, and interpretation of financial records when such activity involves tax matters;

4. Engaging in bookkeeping, the recording of transactions, or the record-making phase of accounting, when such activity is directly related to a tax determination;

5. Preparing tax returns for compensation, gift, or favor;

6. Acting as an agent or attorney for anyone in a claim against the United States or in a matter in which the United States is a party or has a direct or substantial interest, before any department, agency, or court, unless permitted by an exception in 18 USC Section 205. Employees are also prohibited from accepting or seeking compensation for such representational services whether performed personally or by someone else, unless permitted by an exception in 18 USC Section 203;

7. Receiving compensation or honorarium for teaching, speaking, or writing that is related to their official IRS duties unless it is part of their IRS duties. Note: The topic “related to” an employee's official duties are broad and include, for example, any ongoing or announced IRS policies, programs, or operations. Exception: This restriction does not apply to courses offered as part of an established curriculum at a qualified institution of higher education. With prior approval, employees may accept compensation for teaching such courses even if the content relates to IRS policies, programs, or operations; and

8. Unlawful or criminal matters.

(1) Permission is not required to engage in outside employment or business activities that are not considered employment or business, such as:

1. Membership and services (including holding of office) in tax-exempt organizations under Internal Revenue Code 501(c). This exemption does not apply to traditional employment or management relationships with organizations such as employment as a nurse in a tax-exempt hospital, serving as a minister of a church, or managing the organization’s day-to-day activities. For example, requests are not required for volunteer services (that is, hospital work, Red Cross, animal shelter, museum docent, and grief counselor) or services for homeowners’ associations or federal employees’ associations;

2. Membership and services (including holding office) in federal employee organizations and recognized federal employee unions. However, employees in certain positions (for example, Senior Executives) are prohibited from holding office in federal employee unions;

3. Membership and services (including holding office) in the local office of a credit union, whether it is run by or for IRS personnel. Services may include paid bookkeeping work performed by the treasurer, or part-time clerical or teller services;

4. Services as a Notary Public;

5. Sales to the public, such as yard sales, garage sales or the occasional sale of personal items on eBay or Facebook Marketplace. The sale of personal items to coworkers, friends, relatives, and neighbors must not be solicited for or transacted during work hours or in space occupied by Treasury or IRS;

6. Minor services and odd jobs for friends, relatives, or neighbors;

7. Furnishing advice and assistance in the preparation of tax returns where no compensation is accepted;

8. Rental of personally owned property, real or personal. This exemption does not apply to rental of commercial real estate, multi-unit (that is, more than a duplex) residential real estate or listing property with a third-party service, where the employee becomes an agent of the service. If an employee is engaged in or appears to be engaged in operating a commercial business venture, a request and prior approval is required;

9. Temporary (30 calendar days or less) assistance in a family enterprise in cases of an emergency, such as the death, serious illness, or incapacitating accident of a family member engaged in such business. This exception ensures you can assume a share of the responsibilities in family emergencies. A request and approval are required if the need for such assistance continues beyond 30 calendar days or occurs more than once in a calendar year;

10. Custodian of your child’s property, or acting as administrator, executor, guardian, or attorney-in-fact for a relative or friend provided the duties do not entail operation of a business. Such services are not considered legal employment or practice. Acceptance of an executors or trustees fee is permissible if no part of the fee is specifically identified as payment for tax return preparation;

11. Unpaid bookkeeping, preparation of tax returns and other forms required by the Service, and the maintenance of other records for civic, religious, educational, and charitable non-profit organizations which are exempt from federal income tax, and

12. Employment in the National Guard, in any Reserve component of the United States Armed Forces, or as a Federal Emergency Management Agency Reservist.

(1) Legal Employment or Practice- A request to provide legal services may be approved if the proposed activity does not conflict with the employee’s official duties (see IRM 6.735.2.1.3.5, Employee Responsibilities). A conflict exists, for example, if the employee would be involved in a prohibited activity (see IRM 6.735.2.4 Prohibited Outside Employment Activities).

(2) Bookkeeping and Accounting Activities- Employees may engage in the full range of bookkeeping activities (for example, recording transactions and the record-making phase of accounting) provided the activity is not directly related to a tax determination. Employees may also engage in bookkeeping and accounting directly related to a tax determination in the following situations:

1. Keeping the books for a firm or business owned or run by your immediate family if prospects for a conflict of interest are remote; or

2. Engaging in business with your spouse or domestic partner.

(3) Teaching, Speaking, and Writing- Teaching, speaking, and writing activities that involve the Office (see below for explanation), which are not part of an IRS employee’s duties, are considered outside activities that require approval. An activity involves the Office if it:

1. relates to or involves your IRS responsibilities, programs, or activities;

2. draws on information obtained from your IRS employment that has not been made public or is not available to the public upon request (for example, “Official Use Only” information); or

3. involves cost to the Government in either money or time.

(4) Hatch Act, Political Activity- Employees may take an active part in political activities to the extent not prohibited by 5 USC Chapter 73, Subchapter III (the Hatch Act). Some political activities, while permissible per the Hatch Act, are considered outside employment or business activities. Examples of permitted political activities include serving as a:

1. Campaign manager;

2. Election judge; or

3. *Independent candidate for office is specified localities.

   Note: These are examples only. If you have questions about whether your planned political activity requires management approval, contact Chief Counsel, General Legal Services at (202) 317-6999 or Ethics@irscounsel.treas.gov.

   Note: Federal employees are generally prohibited from being candidates in partisan elections. There are limited exceptions for employees running as independent candidates in legally specified localities. If you are interested in pursuing candidacy for any elected office, contact Chief Counsel, General Legal Services, as noted above.

   Note: For details on the Hatch Act, visit the EthicsLink at https://ccintranet.prod.irscounsel.treas.gov/Common/EthicsLink/Pages/default.aspx

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(1) In 2021, the IRS implemented a new OES in HRConnect.

(2) The manager and employee data in the OES, including email addresses, is pulled from HRConnect. If the data in the OES is not accurate, management must submit a Personnel Action Request to correct it.

(3) Each pay period, copies of approved/denied requests are automatically sent from HRConnect to the site responsible for the IRS OPF. A copy of the request is filed in the OPF as required by 5 CFR 3101.104 at https://www.ecfr.gov/current/title-5/chapter-XXI/part-3101/section-3101.104.

(1) Before submitting a request, read this IRM to ensure the outside employment or activity is permitted and does not conflict with your IRS duties.

(2) At least 10 workdays before the anticipated date for accepting or starting a permitted Outside Employment position, add your request to the HRConnect OES.

(3) For step-by-step instructions, go to the HCO Outside Employment site at https://irsgov.sharepoint.com/sites/EmployeeResources/SitePages/Outside-Employment.aspx. Job aids include, for example:

1. How to Add an Outside Employment Request (Video);

2. Outside Employment HRConnect Employee Guide

   Note: If the requester has an active request(s), a pop-up message will display their active record(s). The requester will be asked if they want to end their previously approved outside employment. If they are no longer performing that OE, they click Yes. If the requester wants to continue their previously approved OE, they click No.

(4) Email notices are sent to the employee and their manager beginning with confirmation after the request is added until it’s approved/denied.

(5) If a request is not approved within 10 workdays, the employee is not permitted to accept or start the OE. An email notice denying the request is sent to the employee and their manager. An email is only sent to the second-level manager if they denied the request.

(1) As stated in IRM 6.735.2.4, the written authorization of Commissioner of Internal Revenue is required for requests to appear on behalf of any taxpayer, as a representative, before any federal, state, or local governmental agency, in an action involving a tax matter.

(2) Submit requests for the Commissioner’s approval into the OES. Follow the steps in IRM 6.735.2.8, Submitting Outside Employment Request. In the Business Type field, the requester chooses Taxpayer Representative. They complete the remaining steps saving the request and submitting it for review/approval.

(3) After the second-level manager approves the request, the IRS OE POC receives the request and provides the following instructions management:

1. The employee’s management chain prepares a memorandum, addressed to the Commissioner of Internal Revenue, through the IRS OE POC, describing management’s detailed assessment of the request (for example, any conflict with the employee’s IRS duties, the employee’s requested representational role, any concerns, whether the Deputy Ethics Official provided guidance [if received, attach to memo]).

   Note: To find the IRS OE POC, go to the Outside Employment site at https://irsgov.sharepoint.com/sites/EmployeeResources/SitePages/Outside-Employment.aspx.

(4) After the IRS OE POC receives a reply from the Commissioner of Internal Revenue, they will provide the signed memo to the BUPOC who will share it with the employee’s immediate and second-level managers. The immediate manager will provide the memo to their employee and file a copy in the employee’s Drop File.

(5) Allow a minimum of 45 workdays to process.

(1) Log into HRConnect;

(2) Select the My Outside Employment tile;

(3) Select the appropriate record; and

(4) Review the Status field and comments, if provided.

(1) If an employee wants to withdraw their request for Outside Employment, they will follow the steps below:

1. Log into HRConnect;

2. Select the My Outside Employment tile;

3. Select the appropriate record;

4. Slide the radio button to Withdraw; and

5. Click Continue.

(2) If an employee wants to modify an in-progress request, they will follow the steps below:

1. Log into HRConnect;

2. Select the My Outside Employment tile;

3. Select the appropriate record;

4. Slide the radio button to Modify;

5. Make edits as needed; and

6. Click Continue.

(3) If an employee wants to modify an approved request, they will follow the steps below:

1. Log into HRConnect;

2. Select the My Outside Employment tile;

3. Select the appropriate record;

4. Slide the radio button to Modify;

5. Choose one of the three modification options, which includes ending the request; and

6. Click Continue.

(1) To view or print requests, follow the steps below:

1. Log into HRConnect;

2. Select the My Outside Employment tile;

3. Select the appropriate record;

4. Click View/Print

5. Click Print Outside Employment Request; and

6. Click on printer icon which gives the user the option to print or save as an Adobe pdf.

(2) After the employee receives the email approving/denying the request, they may log into the OES to print/save a copy.

(1) As required by 5 CFR 3101.104(b), all approved/denied requests are automatically sent from the OES to the IRS OPF site electronically for filing in the employee’s OPF.

(2) After the immediate manager receives the email notice advising them the request was approved/denied, they will log into the OES and print the record for filing in the employee’s drop file.

(3) When records are annually reviewed or the employee updates their record to end the OE, copies are not sent to the OPF site or filed in the employee’s drop file.

(1) After an OE request is approved, if an SF-50 is processed for one of the actions listed below, an email is sent to the employee and their first level manager and proxy, if granted, to submit a new request if they want to continue the OE. If the employee is no longer working the OE, they must update their record in the OES to end it.

(1) Employees must update their OE record in the OES when they stop performing OE.

(2) If an employee chooses to end their approved OE, their record cannot be reactivated; however, these records are available for viewing/printing in History in the OES.

(1) In compliance with Document 12829, General Records Schedule, 2.8, Employee Ethics Records, OES records are purged six years after the employee separates from the IRS.

(1) Email notices are sent from HRConnect to the employee 60 days before the annual review is due. The employee may modify limited portions of the record (such as the hours worked) or they may end the OE if they are no longer performing the activity.

(2) Email notices are sent from the HRConnect to the employee’s second-level manager and the employee 30 days before the annual review is due for recertification. The employee may modify or end the record as noted above. The manager will access the OES (see number three below) to complete the recertification.

(3) The second-level manager annually reviews approved OE records and updates the record in the OES. The annual review ensures the information is accurate, does not conflict with the employee’s current IRS duties, and to determine if the approved OE can continue. Per Delegation Order 6-4, Authorization to Engage in Outside Employment, Business, and Other Activities, this responsibility can be assigned to a higher-level manager.

(4) For step-by-step instructions, go to the HCO Outside Employment site at https://irsgov.sharepoint.com/sites/EmployeeResources/SitePages/Outside-Employment.aspx.

(5) Management reminds employees annually of the OE policy and procedures during the mandatory ethics briefing cycle and/or in their business unit’s ethics discussions.

(1) The OES reports help the IRS OE POC, managers and BUPOCs certify new requests are timely approved/denied and the required annual reviews are timely updated in OES. Reports should be run at least monthly to monitor OE records.

(2) Refer to the Outside Employment Business Units Point of Contact Guide at https://irsgov.sharepoint.com/sites/EmployeeResources/SitePages/Outside-Employment.aspxfor instructions on creating an Excel report and sorting data.

(1) As stated in the IRS Ethics Handbook (Document 12011), allegations of ethics violations (such as performing a prohibited Outside Employment activity or working an OE activity without approval) must be reported to your manager or to the Treasury Inspector General for Tax Administrative (TIGTA). Employees can contact TIGTA via email at Complaints@tigta.treas.gov or by phone at (800) 366-4484.

(1) Employees who need help with determining whether an activity they are pursuing is permitted or prohibited should talk to their manager or contact the DEO via email at GLS.Ethics@irscounsel.treas.govor by phone at (202) 317-6999.

(2) Managers who need help with determining if the employee’s IRS duties conflict with their employee’s requested OE activity should contact their supervisor or the DEO via GLS.Ethics@irscounsel.treas.govor by phone at (202) 317-6999.

(3) If you need help using the OES, contact your BUPOC.

(4) If the BUPOC is unable to resolve an OES issue, they will contact the IRS OE POC for help.