IRS Background Investigation Requirements

DEAR COLLEAGUE LETTER

DCL-15-10

DATE:  July 9, 2015

TO:  ALL STATE AND TRIBAL IV-D DIRECTORS

RE:  IRS Background Investigation Requirements

Dear Colleague:

We recently learned that the Internal Revenue Service (IRS) is making extensive changes regarding agency background investigation requirements for any employees and contractors with access to or use of federal tax information (FTI).  According to the IRS, the changes are in response to a recommendation in the 2014 Treasury Inspector General of Tax Administration report .

The IRS indicated it will publish these new requirements in the very near future with its revised Publication 1075.  Here is a draft of the requirements from the IRS.

(DRAFT) IRS Background Investigation Requirements

1. Agencies must develop a policy requiring that employees and contractors with access to or use of FTI must have a favorable background investigation completed.
2. Agencies must immediately initiate a background investigation for all newly hired employees and contractors prior to permitting the newly hired employees or contractors access to or use of FTI.
3. Agencies must, within one year of the published background investigation requirement, initiate a background investigation for each existing employee and contractor with access to or using FTI.
4. Agencies must immediately establish an unfavorable background investigation result criterion for each required element which, if found, would result in preventing or removing an employee’s or contractor’s access to and use of FTI.
5. Agencies must, not less than 10 years from the date of their previous background investigation, initiate reinvestigations for each existing employee and contractor with access to or using FTI. 
6. Background investigations for new and existing agency employees and contractors accessing or using FTI should include, at a minimum:
   • FBI fingerprinting (FD-258) - review of Federal Bureau of Investigation (FBI) fingerprint results conducted to identify possible suitability issues. (Contact the appropriate state identification bureau for the correct procedures to follow.)  A listing of state identification bureau listing scan be found at: www.fbi.gov/about-us/cjis/identity-history-summary-checks/state-ident...
   • Checks at local law enforcement agencies where the subject has lived, worked, and/or attended school within the last 5 years, and if applicable, of the appropriate agency for any identified arrests.
   • Citizenship/residency - Checks conducted on applicants to verify their eligibility to legally work in the United States (e.g., a United States citizen or foreign citizen with the necessary authorization).
   • Credit Checks - Verification of subject’s financial status through a search of all three major Credit bureaus covering all locations where the subject has resided, been employed, or attended school for six months or more for the past seven years.  (In accordance with the Fair Credit Reporting Act, all applicants and employees, including contractor employees, for whom a credit check is initiated, will be notified in writing that credit reports may be obtained for employment purposes. Written consent must be obtained prior to any such reports being procured. Individuals must be notified promptly if information in their credit report may result in any unfavorable action, such as denial of a clearance, employment, or access authorization.)
7. Agencies must make background investigation policy and procedure as well as a sample of completed employee and contractor background investigations available for inspection during an on-site Safeguard review.

Since we have learned of these new requirements only recently, we anticipate states will have difficulty with the IRS-proposed timeline to implement them.  Our regional office program specialists will contact state and tribal directors to better understand your current background investigation process and assess how the requirements will affect your agency.  Your input will help guide our future discussions with the IRS and next steps.

In collaboration with OCSE, IRS Safeguards will host a conference call to discuss the requirements and address your questions.  We will notify you when the date(s) is known.

If you have questions, contact Scott Hale at Scott.Hale@acf.hhs.gov.

Sincerely,

Vicki Turetsky
Commissioner
Office of Child Support Enforcement