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 Parts 432, 531 or 752.

Audience: The policies, authorities, and instructions contained in this IRM apply to all IRS employees who are not serving a probationary/trial period or a temporary/term appointment excluding contractors and Chief Counsel.

Policy Owner: The IRS Human Capital Officer (HCO).

Program Owner: The Policy and Audits division, in the HCO Office of HR Strategy.

Operations Owner: The Labor/Employee Relations and Negotiations (LERN) division, in HCO’s Office of HR Operations.

Primary Stakeholders: LERN 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 or trial period under an initial appointment.

An employee in the competitive service serving in an appointment that requires no probationary or trial period, who has completed one year of current continuous employment in the same or similar positions under other than a temporary appointment limited to one year or less.

An employee in the excepted service who has completed one year of current continuous employment in the same or similar positions.

Reference: 5 CFR Section 432.102(e) and (f).

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

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 manager must promptly contact their servicing LRS or the EMU, as appropriate, for guidance.

An employee covered (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 their performance becomes Unacceptable in one or more CJE(s) or CPE(s) or they fail to meet the Retention Standard. Prior to proposing an action in accordance with 5 CFR Part 432, the employee is given an opportunity to demonstrate an acceptable level of performance (at least Minimally Successful).

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

If an employee’s performance remains at the Unacceptable level and/or they do not meet the Retention Standard after their opportunity to demonstrate acceptable performance, and management initiates a performance-based action under 5 CFR Part 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 Section 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 AD 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 6.432.1.3, Employees Covered, is Unacceptable in one or more CJE(s) or CPE(s), and/or they fail to meet the Retention Standard, the employee’s manager will discuss their performance concerns with the employee and encourage them to improve their performance to at least an acceptable level (Minimally Successful) and/or to meet the Retention Standard to avoid being issued a PIP. After this discussion, management will issue a performance counseling memorandum to the employee and file a copy in the employee’s Employee Performance Folder. Managers also provide oral feedback to assist the employee with improving their performance.

If the employee’s performance remains Unacceptable and/or they continue to fail to meet the Retention Standard, the manager will meet with the employee and advise them they are being issued a PIP with 60 calendar 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 servicing LRS or the EMU, as appropriate. 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:

The opportunity to demonstrate at least an acceptable level of performance may be extended by the manager for up to 60 calendar days. Management will notify the employee in writing of the extension.

A rating of record will not be assigned to the employee while they are 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 their appraisal period is being extended. See IRM 6.430.2.4.2.2, Extension of the Appraisal Period, for more information.

If the employee’s performance improves to Minimally Successful or better, the employee will be notified in writing of their improved performance. The letter will also inform the employee that if the employee’s performance becomes Unacceptable in the same CJE(s) or CPE(s), or the Retention Standard at any time during the year after receiving their PIP, an Advance Notice (proposal letter) will be issued to reduce them in grade/pay/payband or remove them without an additional PIP.

If the employee’s performance remains Unacceptable, a 30-day Advance Notice of a performance-based action will be issued as soon as possible. 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 servicing LRS or the EMU, as appropriate. It is reviewed, approved, and issued by the manager with the delegated authority. See IRM 6.432.1.4, Delegation of Authority.

A 30-day Advance Notice proposing the employee’s reduction in grade/pay/payband or removal must include the following information:

The Advance Notice is delivered 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), the Advance Notice is delivered by encrypted e-mail. If an employee is on extended leave, consideration should be given to delivering the notice via certified mail and U.S. Postal mail. The employee should acknowledge receipt of the notice with their signature and date. 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; delivered 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.

Per 5 CFR Section 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 Section 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, the agency must request prior approval. Management will contact their servicing LRS, or the EMU, as appropriate, 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 their 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, it will be promptly provided to their servicing LRS or the EMU, as appropriate, 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 their decision, and the adverse information was not covered in the proposal letter.

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

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 Section 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, at https://irm.web.irs.gov/imd/del/DOProcessor.aspx?DocID=DO6-29, 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 their appeal and/or grievance rights.

The deciding official will consider any medical condition raised by the employee, and the decision will inform the employee the medical condition they raised was considered. In addition, if the employee has the required years of CSRS or FERS service, they will be provided information concerning application for disability retirement.

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 Section 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 Section 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, at http://publish.no.irs.gov/cat12.cgi?request=CAT1&catnum=63063, 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 432 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 the servicing LRS or the EMU, as appropriate, and with the appropriate Area Counsel, General Legal Services.

When an employee is faced with the prospect of a performance-based action, they may choose to resign, retire, or request a change to lower grade prior to receiving the proposal notice/letter. Whether to resign, retire, or request a change to lower grade, are voluntary. Management’s meeting with the employee to discuss their options are known as “Last Rights” discussions.

If an employee chooses to resign/retire prior to management issuing a proposal letter, managers must contact their servicing LRS or the EMU, as appropriate.

In compliance with this IRM and the National Agreement (for BU employees), management may consider offering “Last Rights” to employees who may be issued a performance-based action.

Per The Guide to Processing Personnel Actions, if an employee chooses to resign, retire, or request a change to lower grade,

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

Per 5 CFR Part 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 their WGI. If they are performing at a Minimally Successful or Unacceptable level, approximately 90 days before they complete their waiting period for the WGI, the manager must contact their servicing LRS or the EMU (regarding GS-15 NBU employees only), for guidance and preparation of the intent to deny WGI notice to the employee.

Per 5 CFR Section 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 their required WGI waiting period, management will issue a notice of intent to deny the employee’s WGI unless their performance improves to at least Fully Successful. The letter is drafted by management’s servicing LRS or the EMU, as appropriate. 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 their less than Fully Successful performance.

If the employee’s performance does not improve to at least Fully Successful, they are issued a notice advising them the WGI is denied. The letter is drafted by management’s servicing LRS or the EMU, as appropriate. 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 them:

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 the employee a notice advising them of 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.

Management may unilaterally, after consultation with their servicing LRS or the EMU, correct mistakes made processing 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 servicing LRS or the EMU, as appropriate, must coordinate these actions with Chief Counsel’s Labor & Personnel Law Branch and/or Equity, Diversity & Inclusion, as appropriate.

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

Per 5 CFR Section 432.107(b), if the employee is not reduced in grade/pay/payband or removed because their performance improved and their 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 file in the employee’s OPF.

For SES employees, see