[ v15 p626 ]
The decision of the Authority follows:
15 FLRA No. 133 INTERNAL REVENUE SERVICE LOS ANGELES DISTRICT OFFICE Respondent and NATIONAL TREASURY EMPLOYEES UNION Charging Party Case No. 8-CA-415 DECISION AND ORDER The Administrative Law Judge issued the attached Decision in the above-entitled proceeding finding that the Respondent had engaged in the unfair labor practices alleged in the complaint and recommending that it be ordered to cease and desist therefrom and take certain affirmative action. The Respondent filed exceptions with respect to the Judge's Decision. /1/ Pursuant to section 2423.29 of the Authority's Rules and Regulations and section 7118 of the Federal Service Labor-Management Relations Statute (the Statute), the Authority has reviewed the rulings of the Judge made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. Upon consideration of the Judge's Decision and the entire record, the Authority hereby adopts the Judge's findings, conclusions, and Recommended Order as modified below. In finding that the Respondent violated section 7116(a)(1) and (8) of the Statute by failing to comply with the provisions of section 7114(a)(2)(B) of the Statute, the Authority agrees with the Judge's conclusions that the tax audit examination, under the factual circumstances presented herein, was but an "extension of the investigation" of the employee; that it constituted an examination of a unit employee by an agency representative in connection with an investigation; that the employee reasonably believed that disciplinary action might result from the examination; and that the employee requested union representation, which request was denied. /2/ However, the Authority disagrees with the Judge's finding that the Respondent's statement to the union steward in the February 25 memorandum that "we must also advise you that your appearance as these employees' representative could constitute a felony" was a threat in violation of 7116(a)(1) of the Statute. In finding that such a statement did not interfere with, restrain or coerce the union steward in the exercise of her rights under the Statute, the Authority notes that such a statement, presented as advice, merely reflected Respondent's reasonable and consistently held position, supported by a March 19, 1981 letter from the Office of Government Ethics, that employees of the IRS are prohibited by 18 USC 205 from appearing as a representative on behalf of any taxpayer (including fellow employees) before any governmental agency. Nothing in the record indicates that the statement at issue herein was anything other than a good faith expression of that position to the union steward. Further, at no time did the Respondent threaten to prosecute the union steward, but merely informed her that her attendance "could" constitute a felony under its interpretation of applicable law. Viewed in this context, a reasonable interpretation of this statement would not have engendered a belief that a threat was implied. Accordingly, the Authority concludes that the Respondent's advice to the union steward did not independently violate section 7116(a)(1) of the Statute, and shall order that this allegation of the complaint be dismissed. ORDER Pursuant to section 2423.29 of the Federal Labor Relations Authority's Rules and Regulations and section 7118 of the Statute, it is hereby ordered that the Internal Revenue Service, Los Angeles District, shall: 1. Cease and desist from: (a) Refusing or failing to afford an opportunity to the National Treasury Employees Union, or any other exclusive representative of its employees, to be represented at a tax audit examination of James Ashley, or any other bargaining unit employee in connection with any investigation which could reasonably result in disciplinary action, when such representation is requested by the employee. (b) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of their rights assured by the Federal Service Labor-Management Relations Statute. 2. Take the following affirmative action in order to effectuate the purposes and policies of the Statute: (a) Afford the National Treasury Employees Union, or any other exclusive representative of its employees, the opportunity to be fully represented at any tax audit examination of an employee in the unit by a representative of the agency in connection with an investigation, if the employee reasonably believes that the tax audit examination may result in disciplinary action against the employee, and the employee requests such representation. (b) Expunge from James Ashley's official personnel folder, and any other documents or reports, any reference to the February 1980 tax audit examination. (c) Refrain from using, in any future disciplinary action against James Ashley, any information obtained or derived from the February 1980 tax audit examination of James Ashley. (d) Post at its facilities in the Internal Revenue Service, Los Angeles District, copies of the attached Notice on forms to be furnished by the Federal Labor Relations Authority. Upon receipt of such forms, they shall be signed by the District Director, Internal Revenue Service, Los Angeles District, or his designee, and they shall be posted and maintained by him for 60 consecutive days thereafter, in conspicuous places, including all bulletin boards and other places where notices to employees in the District are customarily posted. Reasonable steps shall be taken to ensure that such Notices are not altered, defaced, or covered by any other material. (e) Pursuant to section 2423.30 of the Authority's Rules and Regulations, notify the Regional Director, Region VIII, Federal Labor Relations Authority, in writing, within 30 days from the date of this Order, as to what steps have been taken to comply herewith. IT IS HEREBY FURTHER ORDERED that the alleged violation in the complaint pertaining to the statement in the February 25, 1980 memorandum be, and it hereby is, dismissed. Issued, Washington, D.C., August 28, 1984 Barbara J. Mahone, Chairman Ronald W. Haughton, Member Henry B. Frazier III, Member FEDERAL LABOR RELATIONS AUTHORITY NOTICE TO ALL EMPLOYEES PURSUANT TO A DECISION AND ORDER OF THE FEDERAL LABOR RELATIONS AUTHORITY AND IN ORDER TO EFFECTUATE THE POLICIES OF CHAPTER 71 OF TITLE 5 OF THE UNITED STATES CODE FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS WE HEREBY NOTIFY OUR EMPLOYEES THAT: WE WILL NOT refuse or fail to afford an opportunity to the National Treasury Employees Union, or any other exclusive representative of our employees, to be represented at a tax audit examination of James Ashley, or any other bargaining unit employee, in connection with any investigation which could reasonably result in disciplinary action, when such representation is requested by the employee. WE WILL afford the National Treasury Employees Union, or any other exclusive representative of our employees, the opportunity to be fully represented at any tax audit examination of an employee in the unit by a representative of the agency in connection with an investigation, if the employee reasonably believes that the tax audit examination may result in disciplinary action against the employee, and the employee requests such representation. WE WILL expunge from James Ashley's official personnel folder and any other documents or reports any reference to the February 1980 tax audit examination. WE WILL refrain from using, in any future disciplinary action against James Ashley, any information obtained or derived from the February 1980 tax audit examination of James Ashley. WE WILL NOT in any like or related manner interfere with, restrain or coerce any employee in the exercise of any right under the Statute. (Activity) By: (Signature) (Title) Dated: . . . This Notice must remain posted for 60 consecutive days from the date of posting, and must not be altered, defaced, or covered by any other material. If employees have any questions concerning this Notice or compliance with its provisions, they may communicate directly with the Regional Director, Region VIII, Federal Labor Relations Authority, whose address is: 350 South Figueroa Street, 10th Floor, Los Angeles, CA 90071, and whose telephone number is: (213) 688-3805. -------------------- ALJ$ DECISION FOLLOWS -------------------- Robert J. Wilson, Attorney for Respondent David Handsher, For the Charging Party E. A. Jones, Attorney for the General Counsel, Federal Labor Relations Authority Before: Isabelle R. Cappello Administrative Law Judge DECISION This is a proceeding under the Federal-Service Labor Management Relations Statute, 92 Stat. 1191, Chapter 71 of Title 5 of the U.S. Code (hereinafter referred to as the "Statute"), and the Rules and Regulations issued thereunder and published in 45 Fed.Reg. 3482-3524 (1/17/80), 5 C.F.R. 2421 et seq. Pursuant to a Charge filed on March 19, 1980 by the National Treasury Employees Union (hereinafter, "NTEU" or the "Union"), and an amended charge filed on August 29, 1980, a Complaint and Notice of Hearing was issued on August 29, 1980, and an amended Complaint was issued on November 21, 1980, by the Regional Director, Region VIII, of the Federal Labor Relations Authority (hereinafter, the "Authority"). /3/ The amended Complaint alleges a violation by Respondent (also referred to as "IRS") of Section 7116(a)(1) and (8) of the Statute by denying the request of IRS employee James Ashley to be represented by his unit's exclusive representative in an income tax audit examination of his personal Federal income tax returns. The amended Complaint also alleges a violation by Respondent of Section 7116(a)(1) by providing a memorandum to the exclusive representative in which IRS threatened possible felony prosecution if the representative were to represent the employee at the examination. Respondent denies the facts, as alleged, and that any violations have occurred. Statutory Provisions Involved Section 7116(a) of the Statute provides, in pertinent part: (a) For the purpose of this chapter, it shall be an unfair labor practice for an agency-- (1) to interfere with, restrain, or coerce any employee in the exercise by the employee of any right under this chapter; * * * * (8) to otherwise fail or refuse to comply with any provision of this chapter. Section 7114(a) of the Statute provides, in pertinent part: (2) An exclusive representative of an appropriate unit in an agency shall be given the opportunity to be represented at-- * * * * (B) any examination of an employee in the unit by a representative of the agency in connection with an investigation if-- (i) the employee reasonably believes that the examination may result in disciplinary action against the employee; and (ii) the employee requests representation. Section 7102 of the Statute provides, in pertinent part: Each employee shall have the right to form, join, or assist any labor organization . . . freely and without fear of penalty or reprisal, and each employee shall be protected in the exercise of such right. A hearing was held on February 9 and 10, 1981, in Los Angeles, CA. All parties were afforded a full opportunity to be heard and introduce evidence. Briefs were filed by the parties on May 13, 1981. Based upon the record made at the hearing, my observation of the witnesses and their demeanor, and the briefs, the following findings and conclusions are made and order recommended. Findings of Fact /4/ 1. NTEU is the exclusive representative of certain IRS employees, including auditors and revenue agents. Revenue agents are employed in IRS's Examination Division. They conduct field examinations of Federal tax returns. Auditors are also employed in the Examination Division, to conduct less complicated examinations, in IRS offices. (References in this decision to "examiners" refer to both revenue agents and auditors.) Because of the confidentiality of tax information, an employee may not, ordinarily, disclose such information to anyone other than a Treasury Department employee or official. 2. James Ashley is a GS 13 revenue agent employed in IRS's International Tax Section. His duty post is in the Los Angeles District Office, but most of his cases are outside Los Angeles. He has been an IRS employee for 17 years. There are some 3500 employees in the Los Angeles District Office. 3. Beginning on or about May 15, 1978, Mr. Ashley was the subject of a so-called Special Inquiry Investigation by IRS's Inspection Division. This Division is largely responsible for investigating breaches of employee integrity, e.g. IRS's Code of Conduct violations. A Special Inquiry Investigation is begun where circumstances indicate a possibility of a Code of Conduct violation. Initially, the basis of the Ashley investigation was an allegation that Mr. Ashley may not have complied with tax laws in possibly trying to secure for his wife an erroneous refund of taxes paid. The investigation was subsequently expanded to look into other allegations, including possibly impending IRS operations with respect to examination of the tax returns of Mr. Ashley and his wife. Impeding IRS operations constitutes a possible basis for finding an IRS Code of Conduct violation, and discipline. 4. During the period of the Ashley Special Inquiry, Mr. Ashley's 1976, 1977, and 1978 Federal tax returns were being subjected to the scrutiny of IRS's Examination Division. The investigators conducting the Special Inquiry on Mr. Ashley made six or eight contacts with the examiners of these returns during the period of the Special Inquiry. It was one of the examiners who furnished the information upon which the Special Inquiry was expanded to include an allegation of possibly impeding IRS operations. One of the audit reports generated by one of the examiners was "killed" by a supervisor, who because "very irate" over Mr. Ashley, as an IRS employee, challenging a mere $59 deficiency found on one of the returns, and threatened to open up additional areas of his tax returns. The last of the examiners to handle these tax returns of Mr. Ashley was Jacqueline Flynn, in February. She was contacted by an investigator to inquire into the status of the ongoing Ashley examination, in an "attempt to determine, if in fact, there were any activities ongoing on the part of any party to impede the audit." (TR 437-438). Ms. Flynn told him that Mr. Ashley "might do anything to delay or lengthen the Procedures and to forestall any resolution." (TR 381). After Ms. Flynn completed her audit report, and before the last investigator completed his final report on the Special Inquiry, the investigator reviewed Ms. Flynn's audit report on Mr. Ashley. 5. Ms. Flynn, a GS 11 revenue agent, contacted Mr. Ashley about her audit of his 1976, 1977, and 1978 tax returns by letter dated August 3, 1979. She indicated that Mr. Ashley's 1976 return was assigned to her for "completion of the examination" initiated by another examiner. She indicated that she wished to discuss certain items with him "personally," although there would be "no objection" if he wished to have a representative or witness present. (GC 31) She indicated what items needed "verification." (GC 31) 6. Earlier, while Mr. Ashley was overseas on official business, Ms. Flynn had contacted Mr. Ashley's tax representative, Martin Stoger. Mr. Stoger was handling technical aspects of the proper allocation of retirement-income contributions between the separately-filed returns of Mr. Ashley and his wife. This was the issue which had been the focus of the 1976 and 1977 examinations. Mr. Stoger had Mr. Ashley's tax records. Mr. Stoger, whose business is in Houston, TX, declined to come to Los Angeles, where IRS insisted on holding the examinations. Upon Mr. Ashley's return to this country, in January, Mr. Stoger informed Mr. Ashley that he, Mr. Ashley, was being accused by IRS of delaying the examination. 7. After Mr. Ashley returned from overseas, in January, Ms. Flynn set February 26 for the audit, and advised that the examination could continue on February 27 and/or 28 and/or 29. The national average time for the examination of a simple salary tax return is two hours. Mr. Ashley was disturbed that so much time was being set aside for the February examination. 8. Mr. Ashley was also disturbed because he viewed the Flynn audit of his 1976 and 1977 returns as a reopening. There is a dispute as to whether, technically, the Flynn audit was a reopening. It has some indication of a reopening, in that appeal rights had been granted. Reopenings must go through a series of supervisory reviews, and signal that there may be evidence of fraud, malfeasance, collusion, concealment, or misrepresentation of a material fact-- any of which constitutes a Code of Conduct violation which can result in discipline. 9. Mr. Ashley was also concerned over the fact that Ms. Flynn was to examine his 1978 return. His 1978 return would not yet have become available for an ordinary examination unless requested by the Inspection Division. 10. At the time of his scheduled February examination, Mr. Ashley was also disturbed over horror stories he had heard of IRS using employee tax returns to check on employee integrity. 11. On February 21, Mr. Ashley wrote a memo to IRS's District Director, at Los Angeles, in which he stated that he had reason to believe that the examination of his tax returns for 1976, 1977, and 1978 could result in disciplinary action and, therefore, requested that he be given an opportunity to have his Union steward present. He designated Sylvia Kellison as his Union representative, but "only in employment related matters," and not as his Circular 230 tax representative. (GC 3) Circular 230 contains IRS regulations governing the practice of tax representatives before IRS. See GC 4. Mr. Ashley expected Ms. Kellison to advise him on what repercussions he could expect from certain steps and statements he might make, "as an employee versus a normal taxpayer." (TR 307) 12. On February 21, Ms. Kellison, Chief Steward of the Union, forwarded the February 21 memo of Mr. Ashley to the District Director and, in her transmittal memo, stated: "I believe that my representation of the employee in the employment-related matters is not violative of MT 0735.1-10, 237.2(c)(2) and that the Civil Service Reform Act, 5 USC 7114(a)(1) requires me to represent this member of the bargaining unit in this examination." (GC 3 A) MT 0735 is a reference to IRS's Handbook of Employee Responsibilities and Conduct (hereinafter, the "Handbook"). 13. On February 25, Respondent's Chief of Employee-Labor Relations Section, Michael Spies, sent a memo to Ms. Kellison confirming his verbal notification that she would not be permitted to represent Mr. Ashley and another employee, during the examination of their tax returns. The reason given was that "because the examination of these tax returns is outside the employer/employee relationship, the examinations do not fall within the definition of 'investigation' under Section 7114(a)(2)(B)" of the Statute. (GC 28) 14. In the February 25 memo, Mr. Spies also stated that: "We must also advise you that your appearance as these employees' representative could constitute a felony." The memo than stated: "Title 18 USC 205, provides that an employee of the United States who acts as agent for anyone before any department in any proceeding in which the United States is a party or has a substantial interest shall be fined or imprisoned or both." /5/ In addition, the memo warned that IRS's Handbook specifically prohibits employees of the Service from appearing as a representative on behalf of any tax payer before any government agency involving a tax matter." 15. IRS has apparently not interpreted 18 U.S.C. 205, or its Handbook, as preventing Mr. Ashley from acting as his wife's representative, at her tax audits before IRS. Such consent was given by IRS in June. 16. Ms. Kellison did not attend the tax audit of Mr. Ashley because she "felt (she) would be subject to prosecution, and that (she) also might receive a notice of proposed termination based on the Code of Conduct violation that (Mr. Spies) referenced in (his) letter." (TR 111) 17. The February audit of Mr. Ashley's tax returns took place over a two-day period. It took place at an attorney's office in Alhambra, CA, and also involved the returns of Mr. Ashley's wife. Mr. Ashley attended on his own time. He again requested Union representation. Ms. Flynn stated that she lacked the power to act on the request. At the time Ms. Flynn received the Ashley file for audit, in August 1979, she was told that Mr. Ashley was an IRS employee, but she did not receive any instructions to conduct Mr. Ashley's audit differently from that of any other taxpayer. Mr. Ashley and Ms. Flynn were the only persons present at the audit. Mr. Ashley declined to produce records for the 1976 and 1977 returns because he felt that proper reopening procedures were not followed. Mr. Ashley asked Ms. Flynn to sign statements on records he produced and a letter from his wife explaining her nonappearance. Ms. Flynn refused. See TR 358. Mr. Ashley asked Ms. Flynn to provide him with IRS documentation on reopening returns. She replied: "And so I asked him, you know, if you know all these procedures and you know the numbers and you can get them as easily as I can, why don't you just get them, and he said, because I want you to provide them so I can use them in my defense." (TR 361) At the audit examination, Ms. Flynn questioned Mr. Ashley about his 1978 tax returns and examined documents he furnished to verify the return. Mr. Ashley later came to Ms. Flynn's office to request technical advice. He also filed technical appeals. As a result of Mr. Ashley's behavior during the audit, and after, Ms. Flynn formed the conclusion that Mr. Ashley was "uncooperative and difficult." (Tr 382, 381) Ms. Flynn concedes that she may have told the investigator handling the Special Inquiry on Mr. Ashley that Mr. Ashley was being "uncooperative and difficult," when the investigator contacted her about "the status" of her examination of Mr. Ashley's returns. (TR 382-383, 363) Ms. Flynn's testimony on this point appeared to be evasive; and I find that she did, in fact, report Mr. Ashley to the investigator as being uncooperative and difficult. Ms. Flynn did not, on her own initiative, refer any matter concerning Mr. Ashley's audit to the Inspection Division. 18. The Special Inquiry investigative report on Mr. Ashley contained information, inter alia, that Mr. Ashley had "purposefully impeded examination activity." (GC 40) In January 1981, the report was reviewed by Mr. Ashley's supervisor, group manager, and branch manager "for among other things, Rules of Conduct violations." See Stipulation of Facts, #2 (GC 2). They concluded that there was no basis in the report for discipline of Mr. Ashley, and forwarded their recommendations to the Chief of the Examination Division. The Chief, in a referral-back memo raised several questions, including a question as to just what Mr. Ashley had done which could be construed as impeding IRS operations with respect to the examination of his and his wife's tax returns. Further investigation action is still "possible." (TR 428) IRS claims that an "administrative error" occurred in sending the report to Mr. Ashley's supervisors. (RBr 26) The last investigator to work on the Ashley Special Inquiry is not "entirely" aware of why his report was referred to Mr. Ashley's supervisors "except for the fact . . . that t(he) Special Inquiry investigation regarding Mr. Ashley was ongoing for a period of time during which there were also lengthy examination procedures ongoing." (TR 405-406) The general treatment by IRS of employees' tax returns 19. IRS conducts examinations of employees' tax returns under several different programs or procedures. (a) One is the normal computer screening process known as "DIF," which is applicable to all taxpayers. Treatment of employees under the normal screening process varies, somewhat, from that of other taxpayers, however. Employee returns are specially marked and secured to insure employee privacy. Each IRS District maintains a list of all employees currently under audit in the District. However, IRS does not know if all employees being audited are on the list, since employee status is determined only if information on the tax return is sufficient to indicate IRS employment. The purpose of keeping the list is to control the employee examinations only while they are in process; and it is destroyed after audit processes are completed. Employee returns may not be returned by the agent assigned to the audit, for lack of adequate potential to justify an examination, as in the case of other taxpayers, without special permission from higher authority. (b) Another program under which IRS examines employees' tax returns is the New Employee Audit Program. It is applicable to employees going into sensitive positions. (c) Another program is the Employee Under Reporter Program (EURP), in which there is a matching of information documents to returns of IRS employees. Employees do not have to respond to questions by their supervisors under this program. (d) Another program is the Employee Federal Tax Delinquency Program (EFTDP) a non-file, late-file, non-pay program. It is based on an annual computer run to insure employee returns are filed and timely paid, if tax is due. For the period January 1, 1975 through September 30, 1980, 250 cases were referred, under this program. Fourteen reprimands and fifteen oral admonishments resulted. (e) Another program is the National Coordinated Inspection Program (NCIP). The NCIP program was in effect in IRS's Western and Midwest Regions around the time of Mr. Ashley's February audit. The object of this program was to identify and initiate investigation of individual cases of alleged breakdowns in employee integrity. The Western Region includes the Los Angeles District, where Mr. Ashley's February audit took place. The program included review of the 1975-1977 tax returns of technical employees, including revenue agents such as Mr. Ashley. Employees using their "inside knowledge to take advantage of the processing system" were the target. (GC 19.3) Where the Inspection Division had an interest in any matter pending with the Examination Division involving an employee tax matter, the "NCIP coordinator" was to be advised. (GC 20.2) NCIP was underway in April 1979, during which month 78 current or former employees in the Western Region were under audit. By January 12, NCIP had resulted in discipline of three employees. One employee came under suspicion when he became "aggressive with the office auditor" during an examination of his 1976 tax return. This was used as an example, in IRS's April 23, 1979 "NCIP Status Report," of a case turned up independent of NCIP, but which would have been included in the project sample. (GC 21.50) In the Los Angeles District, 78 employees tax returns were referred for examination under NCIP. Throughout the Western and Midwest Regions, 818 returns were referred to the Inspection Division, 231 were referred for audit, and 168 were actually audited. NCIP has ended. No Los Angeles District employees have been disciplined as a result of NCIP. However, there is still a possibility of such discipline, as all investigations generated under NCIP have not been completed. 20. IRS examined all Code of Conduct cases relating to taxes for the period January 1, 1975 through September 30, 1980. In addition to those found under EFTDP and NCIP programs (see findings 19(d) and (3), above.), there were cases where a tax matter was only part of the charge. In one case a tax examiner was removed, in part, for two specifications of failure to file. There was a 10-day suspension of a revenue agent, in part for three specifications for failure to timely file and pay. A contact representative was given a five-day suspension, in part for failure to timely pay and two specifications of failure to report all income. There was a 10-day suspension of a revenue agent, in part for failure to timely pay. There was a removal of a clerk, in part for three specifications of failure to timely file. A probationary employee was terminated for failure to report all income and failure to timely file. One employee retired while a proposed removal was in effect, for claiming false exemptions and appearing on behalf of a taxpayer without approval. There was one case of a removal of a taxpayer service representative for failure to timely file and pay. A tax examiner was removed for, in part, failure to pay and claiming false exemptions. A tax examiner resigned while a proposed removal letter was in effect for making false entries on a return. 21. IRS has another special procedure for examining employee tax returns. Specific and general allegations of employee misconduct are referred to the Inspection Division, which can request that an audit be conducted of the employee's returns by the Examination Division. The case inspector briefs the examiner on pertinent aspects of the pending investigation and maintains liaison with the examiner, who makes status reports to the case inspector "on a timely basis, including any significant information that may develop." (GC 16) Upon completion of the requested audit, "the cooperative examiner" submits a copy of the audit report to the Investigations Branch which requested it. (GC 16) A summary of the audit, and its effect upon the case are reported to the case inspector and made a part of the investigative file. 22. A witness for IRS testified that Mr. Ashley's February audit was not generated under NCIP, EFTDP or EUPP. See TR 321-323. This witness did not identify the program or procedure under which the audit at issue did take place. It is not clear from the record just how or if an employee would know the program under which he was being called in for an audit of his tax returns. Auditors and reviewers know, in part, from the "charge out card." (TR 175). 23. The IRS has a Rule of Conduct dealing with tax matters. It states: (1) The mission of the Service is to encourage and achieve the highest possible degree of voluntary compliance with the tax laws and regulations and to maintain the highest degree of public confidence in the integrity and efficiency of the Service. In light of this mission, it is imperative that our employees comply fully with all applicable requirements of governmental taxing authorities at all levels-- Federal, State and local. (2) It is expected, therefore, that employees will: (a) file timely and properly all tax returns in keeping with the requirements of law, regulation, or ordinance; (b) pay timely any valid tax due. (3) A "valid tax due" as used in this subsection includes: (a) a balance due on an original return as filed with a governmental agency; (b) an uncontested tax assessment of a governmental agency; (c) a tax otherwise due a governmental agency which is acknowledged by the employee; (d) absent (a), (b), or (c) a final administrative determination confirmed by notice of a tax lien issued by a government agency. (4) A "governmental agency" as used in this subsection includes Federal, State, or local agencies. (5) Employees who fail to adhere to this subsection are subject to removal from the Service. See GC 6.1 (Sec. 223.6). Employees are reminded annually of the requirement to file timely and proper tax returns and that they are "subject to disciplinary action, including removal" for failure to do so. (GC 8) 24. Examiners are required to refer Code of Conduct violations to the Inspection Division. Reviewers of the audit report are instructed to "be alert for indications of activity in violation of the Rules of Conduct." (GC 12) If violations are found, reviewers are instructed to send a copy of the report to the Inspection Division. 25. All employees are subject to dismissal and criminal prosecution for failure to report to their supervisors any knowledge or information of the violation of any revenue law by any person, including employees. 26. The Inspection Division ordinarily initiates a Conduct Investigation concerning any Code of Conduct violation referral from the Examination Division. It may initiate a Special Inquiry where circumstances merely indicate a possibility, rather than a probability, of an employee violation of the Code of Conduct, and where there is reason to believe the matter may be resolved favorably to the employee by reviewing the income tax returns in question or interviewing the examiner. Where the examination report of the examiner clearly shows intent to evade taxes, gross negligence or other derogatory information, an investigation may be dispensed with and the information transmitted for appropriate administrative action such as discipline. The results of any Inspection investigation are referred for appropriate administrative action, which can include discipline. All Inspection Conduct cases are routed through IRS's Labor Relations Office. That office gives advice on whether employees should be disciplined because of Code of Conduct violations; and reliance is placed on the tax audit report. 27. There is a dispute as to whether IRS expects its employees to attend their own tax audits. IRS has no written rule on the subject. The Union has not sought advice on the subject and has found no case where an employee was disciplined simply for failure to attend his or her tax audit. In March, an IRS revenue agent, Margarete LeQuesne, requested IRS to give her an interpretation of the Code of Conduct as it applied to an employee audit, namely: "What types of situations would generate disciplinary actions because of an employee audit." (R 15 B). IRS's reply was: "A violation of the Code of Conduct constitutes cause for disciplinary action." (R 15 A) Another IRS employee, David Branson, wrote to IRS on March 26, asking whether he was being "ordered" to attend an audit of his tax return. (GC 26 C) IRS replied: "There is no order to attend the audit." (GC 26 D) At a national negotiation session with the Union, management officials, including the Assistant Commissioner for Coliance, three District Directors, and three Service Center Directors, strongly argued that "it was an employees duty to answer questions in tax audits and to attend their audits, if they were to be a 'good citizen,' they would go to the audit and how could we ask for compliance from other tax-payers if we didn't attend our own audits." (TR 198) IRS eventually conceded, at this session, to allow official time to employees attending a tax audit examination requested by the Inspection Division. The Union has apparently not asked for official time for employees attending other audit examinations. 28. IRS witnesses testified to their belief that IRS did not require employee attendance at their tax audit examinations and to being unaware of any discipline imposed for failure to attend. However, Ms. Flynn expressed her opinion that an employee failing to show up, without prior notice, would be regarded as "uncooperative," and she "suppose(d)" she would characterize such conduct as impeding an audit. (TR 391-392). 29. In view of the strong views expressed by high-ranking, national and field IRS officials, in negotiations with the Union, and the importance attached by IRS to employee integrity in regard to their tax returns, I find that IRS does expect its employees to attend their own tax audit examinations, absent special circumstances, such as being absent from the area on official business. 30. IRS Rule of Conduct Sec. 217.1 (GC 7) provides as follows: Responding to Questions in Matters of Official Interest When directed to do so by inspection or other competent Treasury or Revenue Service authority, employees must testify or respond to questions in matters of official interest. Employees must give such testimony, or respond to questions under oath when required or requested to do so. Tax returns are "matters of official interest." See GC 24. However, an IRS labor relations specialist testified that a revenue agent or tax auditor is not a "competent authority," under Rule 217.1. (TR 453-454) When asked how a violation of this Rule comes about, he testified, somewhat unsurely, that: "I believe that competent authority would have to cite the Rule of Conduct, or something of that nature, and tell the employee that if they did not respond charges would be taken against them, or be made against them." (TR 454) Whether this interpretation has been explained to employees is not a matter of record. Statements made at tax audit examinations are not taken under oath. 31. Returns selected for audit usually indicate a likelihood that IRS may recover unpaid taxes. The presence of a deficiency, in an employee's return, may suggest an improperly-filed return, under the IRS Code of Conduct. If an employee, or his representative does not attend an audit, IRS can disallow claims and find deficiencies, based on what documentation it has available. See TR 386. In some instances deficiencies found have resulted in referrals to the Inspection Division. (TR 460) 32. The Inspection Division, after receiving information developed during the tax audit process, conducts an independent investigation of the underlying facts. During an Inspection Division examination, IRS concedes that a Union representative has the right to be present. (RBr 18) 33. In March, the Chief of IRS's Examination Division, Los Angeles District, sent out a memo to 14 auditors on the subject matter of examining employee tax returns. This was after the Ashley examination here at issue, which occurred in February. The March letter stated that the examinations were "outside the realm of the employer/employee relationship" and that they were "to treat the employee examined as (they) would any other taxpayer." (R 1) The memo also stated: "Under no circumstances are you to invoke regulations pertinent only to Service employees such as those in MT 0735.1-10, Handbook of Employee Responsibility and Conduct, when conducting these examinations." (R 1) The instructions in the March letter do not supersede general instructions that auditors are to report" facts (which) are disclosed upon examination which indicate that an official or employee is, or has been engaged in violation of the Rules of Conduct of the Service." See GC 9 and TR 329-330. 34. The auditors record the taxpayer's position on a particular issue, but not all of the conversation that transpires. An alleged false statement made to an auditor during an examination of an employee tax return can be a basis for a proposed adverse action against an IRS employee. See GC 23. 35. The Inspection Division investigates allegations regarding the filing of proper returns by employees. Inspectors in this Division are not in the same bargaining unit as revenue agents. "Most normally," the examiner of the return is interviewed. (TR 410) "Almost invariably," the employee being investigated is interviewed. (TR 411) At such investigations, IRS recognizes the right of the employee to Union representation. See TR 411. 36. An employee can be disciplined for what comes out of a tax audit examination. Even an uncooperative attitude, such as delaying an audit, can trigger the investigative process leading to discipline. In the Joyce King case involving her proposed removal or disciple, the Chief of the Los Angeles Examination Division cited to her the following language from the IRS Handbook: "An employee may be subjected to severe disciplinary action and prosecution for intentionally making false or misleading verbal or written statements in matters of official interest. Some of these matters of official interest are transactions with . . . fellow employees . . . entries on tax returns . . . and affidavits, transcripts of testimony, or statements to Inspection, whether or not under oath." See GC 23.2. One specification supporting the proposed action was a statement given by Ms. King to a revenue agent in the course of an audit. 37. Between 1975 and 1979, IRS officials imposed upon, or proposed discipline for 37 employees in the Los Angeles District for tax-related violations of the Code of Conduct. Some resulted, in part, from statements made to an IRS agent during the examination of personal tax returns. 38. All Inspection Division cases on employee conduct are routed through IRS's Labor Relations Office which advises on whether the employees should be disciplined because of Code of Conduct violations. In making such determinations, reliance can be placed on the examiner's work papers, report, and testimony. Additional facts relating to IRS's "threat of criminal prosecution" In addition to findings 11 through 16, the following facts relate to this issue. 39. A witness for IRS, who has been the Labor Relations Specialist for the Los Angeles District for about one and a half years, testified that it was the opinion of his Section that it was impossible to differentiate between personnel and tax representation at a tax audit. He reached this opinion after reviewing a memorandum prepared by the Director, General Legal Services Division and which reached the Los Angeles District on January 11, 1979. This memorandum on "Union Representation Rights at Employee Tax Audits under 5 U.S.C. 7114" cites Section 7114(a)(2)(B) of the Statute and concludes that it 'would appear on its face to apply to employee tax audits conducted by the Internal Revenue Service." (R 13.1) It then proceeds to reach a contrary conclusion, by reasoning that the tax audit was not an "investigation within the meaning of 5 U.S.C. 7114(a)(2)(B)" (R 2), and that, even if entitled to union representation, a union representative may not be a fellow employee because "possibly violative of 18 U.S.C. 205," and also "could possibly constitute a conflict of interest." (R 13.9) The memorandum reached the same conclusions "even if Inspection referred an employee for audit." (R 13.10) 40. IRS now concedes that its employees are entitled to Union representation at Inspection-referred audits. Ms. Kellison was allowed to represent an employee at such an audit in late February or early March 1979. At this audit Ms. Kellison advised Bernice Johnson whether or not certain of her answers could lead to discipline and pointed out that statements made in a matter of official interest, such as an audit, result in discipline. 41. In a one-page, three-paragraph letter dated March 19, 1981, the Director of the U.S. Office of Government Ethics, Office of Personnel Management, responded to a letter dated March 13, 1981, from IRS's Acting Director, General Legal Services Division. See attachment to Respondent's brief. The March 19 letter states to the Acting Director: "(Y)ou raise the issue under 18 U.S.C. 205 of whether an employee of (IRS) may represent another IRS employee during a tax audit." The March 19 refers to Section 7114 of the Statute and states that the exception in 18 U.S.C. 205, which allows one agency employee to represent another agency employee in "disciplinary . . . or other personal administration proceeding . . . does not apply to permit employee representation in connection with a tax audit." The March 19 letter states that a tax audit is a "proceeding with a taxpayer (who happens to be an employee);" that it "is distinct from a proceeding with an employee (who happens to be a taxpayer);" and that it is not "characterizable as a labor-management issue." IRS does not reveal whether it shared with the Office of Government Ethics the findings made in this case as to its practice of using employee tax returns as a source for establishing employee misconduct and discipline. Discussion and Conclusions A. Respondent violated Section 7114(a)(2)(B)(i)(ii) of the Statute by denying James Ashley's request for Union representation at the February 1980 tax audit examination of his income tax returns. The principal issue presented here entails the application of the Weingarten right embodied in Section 7114(a)(2)(B)(i)(ii) of the Statute. /6/ That Section expressly provides that the Union shall be given the opportunity to be present at any examination of a bargaining-unit employee by a representative of the agency, in connection with an investigation, if the employee reasonably believes that the examination may result in disciplinary action against the employee, and the employee requests representation. U.S. Department of the Navy, U.S. Marine Corps, Marine Corps Logistics Base, Albany, Georgia, 4 FLRA No. 54 (1980); Internal Revenue Service, Washington, D.C., and Internal Revenue Service, Hartford District Office, 4 FLRA No. 37 (1980). In this case there is no dispute that James Ashley is a bargaining-unit employee, that he requested Union representation at the tax audit examination of his income tax returns, that an investigation into his conduct was ongoing, at the time of the examination, that the request for Union representation was denied, and that Mr. Ashley thereafter attended the examination and was questioned by an IRS revenue agent. Respondent breaks down Section 7114(a)(2)(B) into six component parts, and argues that the General Counsel proved none but the sixth. The six elements are: (1) Any examination; (2) Of an employee in the unit; (3) By a representative of the Agency; (4) In connection with an investigation; if (5) The employee reasonably believes that the examination may result in disciplinary action against the employee; and (6) The employee requests representation. As will be discussed, element by element, IRS is able to sustain its arguments only by taking a myopic view of its employment practices. In particular, it seems to wink at its practice of using employee Federal tax audit examinations as an easily available source of information on employee misconduct, and of allowing its investigators free access to its examiners and their reports. (1) An "examination" took place. IRS argues that the tax audit here involved is not an "examination" because Mr. Ashley did not have to attend it. (RBr 5-9). While stopping short of ordering its employees to attend their own tax audits, high management officials of IRS made it clear to the Union, during bargaining sessions, that employees should attend and cooperate at their own tax audit examinations. Unless special circumstances exist, such as the employee being out of the country on official business, IRS clearly expects such attendance and cooperation by its employees. The revenue agent wrote to Mr. Ashley that she wished to discuss some items on his returns with him "personally," indicated what items needed verification, scheduled the examination, queried him at the examination, and examined documents he furnished. This constitutes a statutory "examination." (2) Mr. Ashley remained an "employee" during the examination. IRS argues that Mr. Ashley was not an "employee" at the time of the audit examination here involved because: the audit was not held at an IRS office and Mr. Ashley attended on his own time as he would with any other "personal task," such as "seeing his barber," or "buying a used car." (RBR 10). Since neither Mr. Ashley's barber nor his car salesman is likely to be questioned by an IRS investigator as to whether Mr. Ashley was impeding IRS operations, on an audit examination of his tax returns, as happened here, the barber/used-car-salesman comparison is not persuasive. Nor are the two cases cited. One, Polson Industries, 242 NLRB 185, 101 LRRM 1344, involves an ex-employee. The other, Mt. Vernon Tanker Co. v. NLRB, 549 F.2d 571 (CA 9, 1977) involves the special relationship that exists during the course of a voyage between the crew and the captain of a vessel, when the normal employer-employee relationship is suspended, and acts normally protected by Federal labor statutes, such as a strike, can be punishable, under maritime law, as a mutiny. The fact that the meeting was not at an IRS offices does not sever the employment bond. IRS has control over where the examination will take place, as is evidenced by the fact that it refused to hold it at the office of Mr. Ashley's tax representative. The fact that Mr. Ashley attended the audit, on his own time, is also insufficient to sever the employment relationship. Presumably, he had to apply to IRS for leave to attend-- something not required of the ordinary taxpayer. (3) The examiner was a "representative" of IRS. IRS argues that no representative of the agency conducted the tax audit examination because the examiner and Mr. Ashley are in the same bargaining unit; the examiner was not authorized to recommend discipline; the examiner was told not to go beyond audit duties in conducting the examination; and the auditor was not a supervisor, management official, confidential employee, or personnel employee. (RBr 11-12). As to the last argument, Ms. Flynn was certainly a "confidential employee" to the extent that she was given free access to confidential information, namely the personal tax returns of an IRS employee. Furthermore, IRS does not disavow any action taken by her. It invested her with authority to audit a fellow employee's tax returns, to schedule appointments with him, to question him, and to examine documents furnished by him. IRS required her to cooperate with the inspector conducting the Ashley Special Inquiry into possible Code of Conduct violations; and she did so. Under these circumstances, IRS disavowal of agency is not persuasive. IRS cites several cases, two involving Facility Review Boards of FAA looking into system errors (FAA Las Vegas), 4 A/SLMR 569, #429 (9/30/74) and FAA Cleveland, 4 A/SLMR 580, #430 (9/30/74) and one involving an agency doctor giving a fitness-for-duty examination (U.S. Postal Service, 252 NLRB 14, 105 LRRM 1200 (1980). The FAA cases were decided before the Supreme Court decided Weingarten and appear to reflect a more restrictive view of the right to union representation than that case, and the Statute now require. The Postal Service case is a post-Weingarten one in which the National Labor Relations Board (NLRB) did hold a union representative was not entitled to be present at the physical examination, as there was no atmosphere of confrontation such as Weingarten envisions; and the doctor was not the supervisor of the employee examined. While Ms. Flynn was not the supervisor of Mr. Ashley, she was required to report conduct and statements made by him to the IRS inspector conducting the Ashley Special Inquiry; and a confrontational situation did exist between Ms. Flynn and Mr. Ashley, leading her to report to the investigator of the Ashley Special Inquiry that Mr. Ashley was difficult and uncooperative. 4. The examination was "in connection with an investigation." IRS argues that the examination here was not in connection with an "investigation," but merely "to determine tax liability." (RBR 13). In making this particular argument, IRS makes no reference, whatsoever, to the Ashley Special Inquiry investigation that was underway at the time the audit was being conducted on Mr. Ashley. Nor does IRS refer to the fact that one allegation being investigated was based on information given to the inspectors by an examiner of Mr. Ashley's tax returns. Nor does IRS refer to the fact that the inspectors working on the Ashley Special Inquiry made continual checks on the status of the Ashley tax audit examinations to determine the validity of the allegation. See RBr 13-15. IRS cites the FAA and Postal Service cases referenced above, and also Alfred H. Lewis, Inc. v. NLRB, 587 F.2d 403, 99 LRRM 2841 (CA 9, 1978). In Lewis, the Ninth Circuit interpreted Weingarten to hold that "the right to representation arises when a significant purpose of the interview is to obtain facts to support disciplinary action that is probable or that is being seriously considered." Id. at 409. In Lewis, union representation was held to be necessary at employee counseling sessions or disciplinary sessions involving production quotas. The Eighth Circuit has used similar language in a case involving a chance encounter in a parking lot when the employee asked for a union steward before the employer had even stated what he wished to discuss. See AAA Equipment Service Co. v. NLRB, 598 F.2d 1142, 101 LRRM 2383 (1979). In view of the continual liaison between the Ashley investigators and examiners, it would appear that discipline of Mr. Ashley was being "seriously considered," under the Lewis and AAA rationale. Subsequent to the Lewis and AAA cases, the Fifth Circuit has taken a more expansive view of Weingarten and ruled: "For the Weingarten rationale to be effectively achieved, courts must not narrow the scope of the doctrine enunciated by the Supreme Court: It is whenever the risk of discipline reasonably inheres in an investigatory interview that a union representation is required, and not merely when disciplinary action is 'probable' or 'seriously considered.'" See Lennox Industries, Inc. v. N.L.R.B., 637 F.2d 340, 344 (1981). In Lennox, an interview of a production-line employee in the office of a second-line supervisor, who made no threats, but merely told the employee to improve productivity, was held to be an investigation. The Fifth Circuit concluded that: "Such questioning is investigatory in that it is designed to elicit responses which might well result in discipline against the employee." Id. at 344. Here, IRS uses examination of employees at tax audits as a method of uncovering misconduct, and requires its examiners to report facts concerning misconduct to its Investigation Division. Therefore, "the risk of discipline reasonably inheres" in any tax-audit examination of an employee's tax returns, under the Lennox interpretation of Weingarten and, ergo, under Section 7114(a) which is fashioned after Weingarten. I believe that this Authority should adopt the Lennox interpretation of Weingarten, as being the correct one. I find distinguishable the Authority case, Internal Revenue Service, Detroit, 5 FLRA No. 53 (1981), relied upon by IRS. In the Detroit case, the Authority found no right to union representation at a meeting between an employee and his supervisor, where the employee's work was being reviewed to see if he had improved, following notification that he was doing substandard work and would be removed if he did not improve. Apparently no response from the employee was sought. Here, responses were sought from Mr. Ashley regarding documents he had submitted to IRS in a matter of official importance, and as to which IRS expected its employees to be as pure as Caesar's wife. The importance of the examiner, as an "investigator" for the Inspection Division, is underscored by the fact that the examiner is the tax expert and is relied upon by the investigators as such. Thus, the tax audit examination is, in essence, but an extension of the investigation. As such, the value of representation is diminished, if the employee is denied it at the very stage where IRS experts are deciding whether he or she has filed an improper return, thereby subjecting the employee to possible discipline. The fact that, at a later investigation, the employer is entitled to representation, is of little consolation. Compare U.S. Customs Service Region VII, Los Angeles, California, 5 FLRA No. 41 (1981), where this Authority rejected compartmentalizing investigations and allowing representation at only a part. In the Customs case, the Authority noted that the section of the Statute here involved "reflects the holding and the ratio decidendi expressed in the Weingarten case, supra, by the Supreme Court in 1975." The Supreme Court in Weingarten, supra, specifically rejected the argument that employee rights could be protected by later representation, and that a decision as to employee culpability or disciplinary action can be readily corrected after the decision to impose discipline has become final. The Supreme Court stated, at 88 LRRM 2693: At that point, however, it becomes increasingly difficult for the employee to vindicate himself, and the value of representation is correspondingly diminished. The employer may then be more concerned with justifying his actions than re-examining them. It is clear, here, that information developed by the examiners immediately became part of the investigation file on Mr. Ashley. To deny him union representation at the part of the process from which IRS derives evidence regarding the employee's attitude, and the properness of his return, is to make a mockery of the statutory right to representation. 5. There was a "reasonable belie(f)" that the February tax audit examination might result in disciplinary action against Mr. Ashley. The preponderance of the objective facts of record refutes IRS's argument that Mr. Ashley had no reasonable grounds for believing that his February tax audit examination might lead to disciplinary action. At the time of the February examination, Mr. Ashley was the subject of a Special Inquiry into an allegation, inter alia, that he was impeding IRS operations, an allegation which grew out of a prior tax audit examination. Impeding IRS operations is a possible basis for a Code Conduct violation. IRS appears to view, as significant, the fact that the last investigator to handle the Ashley Special Inquiry views it as being closed. See RBr 26. Insofar as this case is concerned, the significant fact is that the Ashley Special Inquiry was active at the time Mr. Ashley sought union representation. Investigators handling the Ashley special Inquiry were in continual touch with the examiners handling Mr. Ashley's tax returns, in the course of investigating the allegations of impeding IRS operations. One supervisor had threatened Mr. Ashley with opening up additional areas of Mr. Ashley's 1976 tax return, which was to be one subject of the February examination. An examiner had been assigned, for the third time, to examine several of his returns and, in addition, was looking into his 1978 return in an unusually short time after filing, unless at the request of the Investigation Division which investigates employee misconduct. In addition, it was known to employees that IRS had an ongoing program, at the time of February examination, under which it was using the tax returns of employees to ferret out instances of employee improprieties. Employees also knew that examiners of their tax returns were under orders to report any possible violations of IRS's Code of Conduct. Conduct and statements made at a tax audit examination can result in specifications being filed against an employee which, if proved, can lead to discipline. Since the examiners are the IRS experts on tax returns, investigators tend to accept their findings on technical matters. IRS expects it employees to attend and cooperate in the conduct of their tax audit examinations. The totality of these objective facts substantiates Mr. Ashley's fears that his February tax audit examination might lead to discipline. B. Respondent violated Section 7116(a)(1) and (8) of the Statute by threatening a Union steward, attempting to exercise the right granted by Section 7114(a)(2)(B), with a Code of Conduct violation and possible criminal prosecution. Ms. Kellison, Chief Steward of the Union, did not attend the tax audit of Mr. Ashley out of fear of possible criminal prosecution and possible loss of her job under IRS's Code of Conduct. This fear undoubtedly continued to chill her participation in the right granted to her Union in Section 7114(a)(2)(B) to be represented at tax audit examinations of the type here involved. Since this is a statutory right, IRS's Code of Conduct must yield to it. And surely Congress did not grant this right only to subject the exercise of it to possible criminal prosecution, under 28 U.S.C. 205. IRS is only able to justify its action in scaring Ms. Kellison with the specter of criminal prosecution, by closing its eyes to its use of employee tax audit examinations in connection with disciplinary proceedings. (Even IRS does not argue that investigations into employee integrity are not "disciplinary . . . proceedings," which 28 U.S.C. 205 specifically excludes from its mandate.) IRS employees subjected to examination of their Federal tax returns have a dual exposure-- to the penalties of any taxpayer; and also to the threat of disciplinary action because of their employee status. The cases cited by IRS to support its position do not deal with any situation such as the one here involved. One case held that Federal employees could not represent indigents in criminal proceedings because of a basic conflict of interest regarding their duty to their clients and the Government prosecuting their clients. See RBr 28, citing U.S. v. Bailey, 498 F.2d 677 (CA DC, 1974). Here, Congress has passed a statute which obliges Federal employees to represent fellow employees in actions involving their agency and, when appropriate, take positions adverse to those of their agencies. IRS cites another case where a court rejected an opinion by the Attorney General that a Federal employee did not violate 18 U.S.C. 205 by representing fellow employees in an action under Title VII of the Civil Rights Act of 1974. See RBr 29, citing Bachman v. Pertechuk 437 F.Supp. 973 (DDC, 1977). Of course, it is the Attorney General, and not a Federal judge who determines whether prosecution will be brought under a criminal statute-- which is what is of concern here. But, in any event, the focus of the Bachman case was entirely different, involving a question of whether a Federal employee could represent fellow employees in a class action, when he was a member of the class himself and might have adverse interests to other members of the class. Another case cited by IRS, U.S. v. Bynoe, 562 F.2d 126 (CA 1, 1977), at page 29 of its brief, also involved 18 U.S.C. 205, in a situation where a Federal employee represented persons who were not employees of the agency at which he was employed, and for which he was paid a fee. Clearly, this is not like the situation here involved. IRS professes to fear that Ms. Kellison would use "inside" information in regard to tax matters in representing Mr. Ashley. See page 29 of its brief. The fact is that Mr. Ashley is himself an "insider," and very knowledgeable about the workings of IRS in regard to tax matters. The illogic of IRS's position is illustrated by the fact that IRS is allowing Mr. Ashley to represent an outsider (his wife) in her tax audit examination. Finally, IRS relies on a March 19, 1981, letter which it received from the Director of the Office of Government Ethics (OGE) following the hearing in this case, in February 1981. See appendix 1 to IRS's brief. The letter states that is in response to a March 13 letter from IRS raising "the issue under 18 U.S.C. 205 of whether an employee of the Internal Service (hereinafter "IRS") may represent another IRS employee during a tax audit." The Director concludes that it may not be done. The Director does not state, in the letter, what facts IRS revealed to it about its practices in conducting employee tax audit examinations; and IRS did not see fit to attach a copy of its March 13 letter to OGE. If IRS stated, as it argues here, that the sole purpose of an employee tax audit is to ascertain tax liability, and that the employee is treated just like any other taxpayer, then the OGE letter does not address the factual situation presented in this case. Furthermore, the OGE letter is not a "formal advisory opinion" under CFR Part 738.303 (46 F.R. 2585) January 19, 1981, as claimed by IRS in footnote 3 of its brief. See RBr 32. Such opinions bear a number. See Part 738.305(a)(1). This one does not. Copies of such opinions are made available for public inspection within 10 working days after issuance by OGE. See Part 738.310(b). The March 19 letter was not so available when I checked at OGE in June. The March 19 letter appears to have no status other than "informational assistance," as explained at 5 Cfr part 738.312(b)(1). Accordingly, no reliance is being placed on the OGE letter, in this decision. OGE regulations do provide a means whereby IRS may obtain a definitive opinion on the subject, however. The regulations provide for revealing "all material facts necessary for the Director to render a complete and correct opinion." See 5 Cfr part 738.304(b)(1). OGE may then seek information from other sources as well. See Part 738.305(b). OGE may provide the Union an opportunity to submit written comments. See Part 738.307. And the Department of Justice is consulted before issuance of the opinion. See Parts 738.305(d) and .308(a)(2). Until such time as IRS has such a formal advisory opinion, stating that a Union steward may not represent an employee at a tax audit examination of the type here involved, it may not render the gratuitous advice here at issue without committing an unfair labor practice. Ultimate Findings and Recommended Order It is found that Respondent has committed the alleged unfair labor practices, in violation of Sections 7116(a)(1), by interfering with, restraining, and coercing Mr. Ashley and Ms. Kellison in the exercise of protected rights and of Section 7116(a)(8), by failing to comply with the provisions of Section 7114(a)(2)(B), of the Federal Service Labor-Management Relations Statute. Pursuant to Section 7118(a)(7) of the Statute and Section 2423.29 of the Rules and Regulations of the Federal Labor Relations Authority, it is therefore, ORDERED, that Internal Revenue Service, Los Angeles District, shall: 1. Cease and desist from: (a) Refusing or failing to afford an opportunity to the National Treasury Employees Union, or any other exclusive representative of its employees, to be represented at a tax audit examination of James Ashley, or any other bargaining unit employee, in connection with a subsequent investigation herein, or any other investigation which could reasonably result in disciplinary action against him or such employee when such representation is requested by the employee. (b) Interfering with, or discouraging, by implied threat of felony prosecution, or otherwise, Chief Steward Sylvia Kellison, or any other employee, from exercising the right as a union representative to be present at the tax audit examination in connection with an investigation, where the employee reasonably believes discipline may result and representation has been requested. (c) In any like or related manner interfering with, restraining, or coercing its employees in the exercise of their rights assured by the Federal Service Labor-Management Relations Statute. 2. Take the following affirmative action in order to effectuate the purposes and policies of the Statute: (a) Afford the National Treasury Employees Union, or any other exclusive representative of its employees, the opportunity to be fully represented at any tax audit examination of an employee in the unit by a representative of the agency in connection with an investigation, if the employee reasonably believes that the tax audit examination may result in disciplinary action against the employee, and the employee requests such representation. (b) Withdraw and rescind the February 25, 1980, memo from Michael Spies to Chief Steward Sylvia Kellison and inform the National Treasury Employees Union in writing of such withdrawal and rescission. (c) Expunge from James Ashley's official personnel folder, and any other documents or reports, any reference to the February 1980 tax audit examination of James Ashley. (d) Refrain from using, in any future disciplinary action, any information obtained or derived from the February 1980 tax audit examination of James Ashley. (e) Post at its facilities in the Internal Revenue Service, Los Angeles District, copies of the notice marked "Appendix," on forms to be furnished by the Federal Labor Relations Authority. Upon receipt of such forms, they shall be signed by the District Director, Internal Revenue Service, Los Angeles District and they shall be posted and maintained by him for 60 consecutive days thereafter in conspicuous places, including all bulletin boards and other places where notices to employees in the District are customarily posted. The District Director shall take reasonable steps to ensure that such notices are not altered, defaced, or covered by any other material. (f) Pursuant to Section 2423.30 of the Authority's Rules and Regulations, notify the Regional Director, Region VIII, Federal Labor Relations Authority in writing, within 30 days from the date of this Order, as to what steps have been taken to comply herewith. ISABELLE R. CAPPELLO Administrative Law Judge Dated: July 7, 1981 Washington, D.C. APPENDIX NOTICE TO ALL EMPLOYEES PURSUANT TO A DECISION AND ORDER OF THE FEDERAL LABOR RELATIONS AUTHORITY AND IN ORDER TO EFFECTUATE THE POLICIES OF CHAPTER 71 OF TITLE 5 OF THE UNITED STATES CODE FEDERAL SERVICE LABOR-MANAGEMENT RELATIONS WE HEREBY NOTIFY OUR EMPLOYEES THAT: WE WILL NOT refuse or fail to afford an opportunity to the National Treasury Employees Union, or any other exclusive representative of our employees, to be represented at a tax audit examination of James Ashley, or any other bargaining unit employee, in connection with a subsequent investigation herein, or any other investigation which could reasonably result in disciplinary action against him or such employee, when such representation is requested by the employee. WE WILL NOT interfere with, or discourage, by implied or express threats of felony prosecution, or otherwise, Chief Steward Sylvia Kellison, or any other employee, from exercising the right as a union representative to be present at the tax audit examination of James Ashley, or any other tax audit examination in connection with an investigation, where the employee reasonably believes discipline may result, and representation has been requested. WE WILL afford the National Treasury Employees Union, or any other exclusive representative of our employees, the opportunity to be fully represented at any tax audit examination of an employee in the unit by a representative of the agency in connection with an investigation, if the employee reasonably believes that the tax audit examination may result in disciplinary action against the employee, and the employee requests such representation. WE WILL expunge from James Ashley's official personnel folder and any other documents or reports any reference to the February 1980 tax audit examination of James Ashley. WE WILL refrain from using, in any future disciplinary action against James Ashley, any information obtained or derived from the February 1980 tax audit examination of James Ashley. WE WILL NOT in any like or related manner interfere with, restrain, or coerce any employee in the exercise of any right under the Statute. (Agency or Activity) By: (Signature) Dated: . . . This Notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. If employees have any questions concerning this Notice or compliance with any of its provisions, they may communicate directly with the Regional Director of the Federal Labor Relations Authority, Region VIII, whose address is 350 South Figueroa Street, 10th Floor, Los Angeles, CA 90971, and whose telephone number is (213) 688-3805. --------------- FOOTNOTES$ --------------- /1/ The General Counsel filed untimely exceptions which have not been considered. /2/ Our decision herein is limited by the factual circumstances presented, i.e., that the audit was but an "extension of the investigation" of the employee; it should not be construed as allowing union representation at all tax audits of Internal Revenue Service's employees. /3/ The amended Complaint consolidated two other cases against the Respondent and the Internal Revenue Service, Washington, D.C., (8-CA-553 and 8-CA-715). At the hearing, the Complaints in those two cases were severed from this proceeding; and the Complaint and amended Complaint were so amended. /4/ References to the record will be as follows: "TR" refers to the transcript; "R" Refers to Respondent's exhibits; "GC" refers to the General Counsel's exhibits; "RBr" refers to the Respondent's brief; and "GCBr" refers to the General Counsel's brief. Multipage exhibits will be referenced by the exhibit number followed by the page numbers. All dates referenced are in 1980, unless otherwise specified. /5/ Not quoted was the proviso of 18 U.S.C. 205 that: Nothing herein prevents an officer or employee, if not inconsistent with the faithful performance of his duties, from acting without compensation as agent or attorney for any person who is the subject of disciplinary, loyalty or other personnel administration proceedings in connection with those proceedings. /6/ The name is derived from N.L.R.B. v. J. Weingarten, Inc., 420 U.S. 251, 88 LRRM 2689 (1975) in which the United States Supreme Court upheld the holding of the National Labor Relations Board that the employer's denial of an employee's request that her union representative be present at an investigatory interview, which the employee reasonably believed might result in disciplinary action, constituted an unfair labor practice in violation of Sec. 8(a)(1) of the National Labor Relations Act (29 USC 158(a)(1)).